Despite a supreme court order prohibiting the Central Bank of Nigeria (CBN) from enforcing the deadline for depositing old naira notes, the apex bank has reiterated that the new naira notes are now legal tender.
The CBN had originally set January 31 as the deadline for old notes to be removed from circulation, but it was extended to February 10 in response to public pressure.
While many Nigerians are still using the old naira notes in some parts of the country, however, there has been silence on the part of the apex bank since the court gave its ruling.
According to the CBN, old N200, N500, and N1000 have ceased being legal tender since February 10, 2023.
Commenting on the development in a chat with journalists, CBN Branch, Controller in Bauchi, Haladu Idris Andaza said the old notes were no longer legal tender.
“In the last 24 hours, we have been inundated by questions from various angles of the general public about our operational guidelines on the old currency notes, be that as it may, there are so many questions here and there that people have been asking about.”
“So for the avoidance of doubt, we wish to state categorically that CBN is ready and is open to receiving all of those old notes based on certain conditions and criteria. Customers are free to come to the Bank and deposit which they cannot do at the Commercial Banks anymore because the currency has been seized to be legal tender since the 10th of this month.
“Consequently, the management of the CBN decided that those customers will have a sigh of relief by coming to the offices of the CBN in all the 36 states in the Federation including FCT to deposit their money.
“The customer has to go to the CBN portal and fill a form in the portal, there will be a form there concerning this currency redesign and exchange. After filling out the form, you generate a code, either print it or come with it on your mobile phone, and give us the code and the information contained therein. In the form, you are expected to provide all the basic information about yourself, your account details, and the amount you want to deposit.”
“By the time you have done it correctly, you come to the CBN where the code will be accepted from you as well as the money, process and confirm the genuineness or otherwise of the money to avoid receiving fake notes because there are some fake notes in circulation now.”
The Central Bank of Nigeria (CBN) has urged Nigerians to use eNaira and internet banking instead of cash.
eNaira is a central bank digital currency issued and regulated by the Central Bank of Nigeria. It serves as both a medium of exchange and a store of value and claims to offer better payment prospects in retail transactions when compared to cash
Osita Nwanisobi, Director of Corporate Communications at CBN, stated at the recently concluded 44th Kaduna International Trade Fair that the Nigerian payment system infrastructure could handle the surge in transaction volumes across all payment channels.
Following the implementation of the naira redesign policy, citizens have struggled to obtain naira notes from banking halls and automated teller machines (ATMs), according to the CBN Director.
Mohammed Abbah, CBN’s Director of capacity development, represented Nwasinobi at the event.
On the naira redesign policy, he said the initiative was not aimed at any individual, as was insinuated in the public domain.
“The CBN Governor, Mr. Godwin Emefiele, has always said that the policy is not targeted at anyone or any group of persons, rather, it is derived from the bank’s in-house analysis to strengthen our macroeconomic fundamentals and better our socio-economic conditions,” Nwanisobi said.
“The principal aim of the bank, with the currency redesign initiative, is to make our monetary policy decisions more efficacious.
Advertisement
“Nigerians will observe that there has been a downward trend in inflation, and the exchange rates have been relatively stable.”
“Furthermore, we aim to increase financial inclusion in the country by reducing the number of unbanked people.”
“Thirdly, we aim to support the efforts of our security agencies in combating banditry and ransom-taking in Nigeria through this program.”
The CBN director said the apex bank was aware of the challenges some citizens have had to face in the past few weeks in efforts to get money from their banks.
He said that there have been reports of occasional transaction failures on alternative payment channels.
“However, we wish to assure you that the Nigerian payment system infrastructure is robust enough to handle the surging transaction volumes across all channels,” Nwanisobi said.
“We, therefore, urge Nigerians to embrace alternative payment channels, such as e-Naira and internet banking, as we embrace the cashless policy.”
Mr. Manish Singhal has been appointed as a Non-Executive Director of Sterling Bank Plc.
This information was found in a corporate disclosure document that the bank gave to Nigerian Exchange Limited.
The appointment followed the Central Bank of Nigeria’s approval, according to a statement made by Temitayo Adegoke, Company Secretary & Chief Legal Counsel.
Manish Singhal has over twenty-six (26) years of expertise in the financial services industry, according to his statement about him.
He also oversees the implementation of IT-related policies and the activities relating to the IT infrastructure of SBI, among other responsibilities.
Before his current role at SBI, Singhal worked as a full-time Director and Chief Financial Officer at SBICAP Securities Limited (a wholly owned subsidiary and broking arm of the State Bank of India). During his career at SBI, Singhal has held several other positions.
He has vast experience in Business Development, Risk Management, Compliance, Customer Service, Human Resources, Administration, and Products Development
The current naira scarcity, occasioned by the currency swap policy of the Central Bank of Nigeria (CBN), is taking a toll on every Nigerian. To address this situation, the Bank Directors Association of Nigeria (BDAN) has released a statement providing solutions.
BDAN Chairman, Board of Directors, Mustafa Chike-Obi stated that the organization sympathizes with members of the public at this critical juncture.
“We are mindful of the discomfort and hardship associated with the current currency reform which has introduced the newly designed naira notes and reduction in withdrawal limit. It has indeed been a difficult period for Nigerians and BDAN is making it a top priority to ensure that this hardship is not only addressed but eliminated,” he said.
The group said it is in constant communication with all the banks and is assured that they are all doing whatever is within their control to normalize this difficult situation.
“We enjoin the banking public to maintain peace, rest assured that BDAN is taking all reasonable steps to influence the structure and mechanisms that should free up bottlenecks and open channels that will speed up the resolution of the crisis. The Bank Directors Association of Nigeria (BDAN) hopes to count on the public’s patience, understanding, and cooperation,” he said.
Before we dive into this highly anticipated subject, let’s cover the basics. A cashless economy refers to an economic system based on digital payments and cash alternatives such as debit and credit cards, mobile and internet banking, as well as digital wallets.
Godwin Emefiele, Governor of the Central Bank of Nigeria
According to Fintech Magazine, Sweden is currently the most cashless economy in the world, with many Swedish banks no longer accepting cash deposits, 32 Automated Teller Machines (ATMs) per 100,000 people and cash accounting for only 1% of all transactions.
As a result of this, Riksbank, Sweden’s Central Bank, can adequately account for the amount of money in circulation. By going completely cashless, the transfer of funds is seamless across the country, the risk of cash theft is mitigated and there is overall transparency and accountability across Sweden.
The Central Bank of Nigeria (CBN) first issued the framework for its cashless policy in 2012, to reduce the amount of physical cash in circulation, deepening financial inclusion by driving digital payments, reducing fraud and curbing cash-aided crimes such as terrorism financing, kidnapping, extortion, blackmail, and so on.
Today, the maximum weekly withdrawal limits for individuals and corporates across all channels are N500,000 and N5,000,000 respectively.
In an event where cash withdrawal exceeds these limits, a processing fee of 3% and 5% will be incurred for individuals and corporates, respectively. In addition, third-party cheques exceeding the sum of N100,000 are not eligible for over-the-counter (OTC) payment.
Nigerians queuing at ATM gallery in the night – Photo by Bloomberg
On the surface, a cashless economy in itself does not seem like a bad policy. Anyone who has been paying attention to the global payments trend knows that a cashless world looms and that it is only a matter of time till hard notes become obsolete or close enough.
To support this, Bain and Company report that 67% of global payments will be done digitally by 2025. Already, we are experiencing digital-only banks (neo-banks) and contactless payments with the help of smartphones and super-fast networks. We are also experiencing emerging digital trends such as the use of cryptocurrency for payments and settlements, which has inspired some central banks to pick up the innovator hat.
In October 2021, Africa’s first Central Bank Digital Currency (CBDC), the E-Naira, was born as part of the strategic drive away from cash. We once used gold bars, barter, ivory shells and coins as modes of payment, remember? The use of cash as a medium of exchange has been declining gradually for years.
The drive for a cashless economy at all costs by the CBN is strategic, however, the execution and results have been described by many pundits as suicidal.
The new naira notes became legal tender on 15th December 2022, after being unveiled the previous month by President Muhammadu Buhari and CBN Governor, Godwin Emefiele.
In an announcement that would reverberate through the whole country, over 200 million Nigerians were given just under two months, until 10th February 2023, to get with the status quo, even after a series of backlash and expressions of displeasure by the public.
The cash swap is being driven on steroids. This may be perceived to signal insensitivity and a lack of consideration of key stakeholders by the apex bank. A cashless policy should bring about greater ease and convenience of payments, but is the opposite effect materializing in Nigeria today?
Challenges with execution may be leading to the erosion of trust in the banking system, with merchants asking for cash payments despite empty ATMs, digital channels increasingly overwhelmed and POS charges inching towards 50%. When the United Kingdom issued new £20 and £50 notes, both the old and new pound sterling notes co-existed for about eighteen (18) months until naturally, the old notes were no longer in circulation, as the case should be.
The current predicament facing Nigeria can be likened to what happened in November 2016, when India introduced its demonetization policy to reduce the circulation of high denomination rupees, as well as to tackle corruption, tax evasion and other illegal activities.
Similarly, cash withdrawals from banks were restricted to 10,000 rupees (US$150) daily and 20,000 rupees (US$300) weekly.
The policy made it near impossible for Indians to access their hard-earned money for a long time, resulting in many controversies, deflated trust in the Indian government and an overarching negative economic impact.
India’s cashless policy was not successful because the challenges and concerns of the people such as preferences, economic development and technological advancement, were not adequately addressed. The same situation is being experienced in Nigeria today, with empty ATMs and exorbitant POS charges.
Based on the points discussed thus far, let us examine some conditions necessary for a cashless policy to be successful:
Diagram: FintechNGR
One thing is clear. When adopting a cashless policy (or any other policy for that matter), it is more important to have a customer-centric approach rather than a technical one. The success of a cashless policy is directly linked to the incentives offered to encourage mainstream adoption.
For example, the Swedish government made sure that the cost of transacting with cash was more than the cost of making card payments. There is also a trust factor that needs to be considered when it comes to convincing people to go completely digital. Additionally, a key question needs to be asked: “can our current IT infrastructure handle the increase in transaction volumes if a significant chunk of the population moves towards digital payments?”. If the answer is yes, then half of the anticipated problems are gone already.
If the answer is no, then perhaps more efforts must be made to prepare a country with a large population like Nigeria to adopt a cashless policy. According to data released by the Nigeria Inter-Bank Settlement System (NIBSS), payments made via electronic channels hit an all-time high value of N42 trillion in December 2022.
Payment (ATM) Cards
This is a 52% year-on-year increase from December 2021. Similarly, the total volume of transactions processed by NIBSS also jumped from N3.4 billion in 2021 to N5.1 billion in 2022.
This represents a 50% increase year-on-year. This upward trend will not slow down anytime soon – does Nigeria have the right internet and IT infrastructure to handle the hyper surge in transaction volumes? Only time can tell.
The level of financial inclusion is a key factor to consider when pursuing a cashless strategy. The Guardian Newspaper tells us that Nigeria is one of the top three unbanked countries in the world, with 40% of its population without a bank account and out of the 59 million unbanked adults, 73% do not have the requisite documents to open a tier-three bank account. Furthermore, the unbanked population are characterised by low levels of education, extreme poverty and are usually concentrated in rural areas.
For instance, Kaduna is arguably the most modernised state in the north; yet, up to two local governments are still without bank branches.
In addition, POS machines are also ineffective due to a lack of a strong network in these areas, and residents would need to travel at least 200 kilometres to the nearest bank branch to deposit old notes, without knowing when to expect the new notes!
The cashless situation has led to ATM vandalism, the burning of banks, the threatening of bankers and violent protests across the entire country. As turmoil spreads across the nation, it has laid bare one inescapable fact – that the poor and disadvantaged are bearing the brunt of the collapsing economy.
There is a glimmer of hope, however, that the cashless strategy is not without its benefits to the Nigerian economy. For instance, a recent report by TechPoint Africa revealed that CBN could not account for N26.17 trillion in 2021.
In contrast, N1.9 trillion of unbanked currency has since been recovered and accounted for since the launch of the new naira notes. The CBN governor, Godwin Emefiele said that as of October 2022, more than 80% of the N3.2 trillion ($7.2 billion) in circulation in Nigeria was held privately, but 75% of that has now been deposited with financial institutions.
The cashless strategy, therefore, serves as a tool to control inflation, increase transparency and financial system stability which is the key mandate of the apex bank. Secondly, the timing of the policy around the upcoming presidential elections could make vote buying and bribes more difficult than ever before.
Digital Payment channels
Finally, could this be the push we so desperately needed to achieve the goals of the National Financial Inclusion Strategy (NFIS) of 95% inclusion by 2025? In particular, the Shared Agent Network Expansion Facility (SANEF) initiative of the CBN and Bankers Committee must be commended for bringing financial access to remote areas and increasing the number of agents from just over 38,400 in December 2018, to 1.4 million agents in October 2022. It presents the possibility of a world where people living in remote areas would not need to travel long distances to carry out banking activities.
The rise of financial technology (FinTech) companies in Nigeria has revolutionised the way we perceive and consume financial services. Nigeria is now the third African country with the most progress in FinTech activity, following South Africa and Kenya.
Digitally-led banks and FinTechs with strong e-payment capabilities are leveraging the cashless strategy to drive further growth and focus on operational efficiency. The witnessed jump in transaction volumes will serve as a strong foundation to build more value-added services for different classes of consumers.
If done properly, FinTechs could win over the portion of the populace that was once sceptical about their services. Additionally, many banks are establishing standalone payment services to drive the efficacy of online transactions. As Nigeria transitions into a cashless economy, great prospects lie ahead for payment service providers in terms of a larger consumer base, a wider range of services offered and ultimately, revenue growth.
Traders using PoS machine to accept payment
We are eager to hear your thoughts on this riveting subject. Is the drive for a cashless economy by CBN a strategic or a suicidal move?
How can FinTechs create viable and profitable solutions to address the situation? Drop a comment below to keep the conversation going!
The circumstances surrounding the Naira’s scarcity have led some Nigerians to resort to violence in some parts of the country, prompting bankers to dress casually to work.
According to reports, some frustrated Nigerians who were unable to withdraw money broke ATM terminals at several banks. Others forced their way into the banking premises in order to cause havoc.
Bank officials are becoming targets and at the receiving end of the anger of frustrated customers.
Videotapes show that some of the bankers were attacked on their way home from work. Bank employees are concerned about potential social unrest if the situation is not addressed, expediently.
“The scarcity is even affecting us who work in the bank.” “I don’t even have the cash to transport myself home after today’s work,” an Acess Bank official who doesn’t want her name mentioned told TechEconomy on a Friday phone call.
“The social unrest is something that scares us too. We don’t dress corporate to work anymore. We oy wear jeans and polo shirts.”
Naira Deadline Saga
Nigerians are currently in a dilemma over two conflicting orders from the Supreme Court of Nigeria and the Central Bank of Nigeria. The CBN has set the deadline for the submission of the old naira notes for today, February 10, but the Court is saying otherwise.
Two days ago, the apex court restrained the Federal Government from implementing the February 10 deadline, after three northern states—Kaduna, Kogi, and Zamfara—had, in a motion ex-parte filed on February 3rd by their lawyer, Abdul Hakeem Mustapha (SAN), prayed the apex court to halt the Central Bank of Nigeria’s (CBN) naira redesign policy.
Meanwhile, in another judgment, the Federal Capital Territory (FCT) High Court in Wuse Zone 2, Abuja, directed the CBN to ensure that its 10-day deadline for the validity of old naira notes is met.
Eleojo Enenche, the judge, issued the order on Monday in response to an ex parte application filed by four opposition political parties.
The four parties—Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM), and National Rescue Movement (NRM)—claimed in their applications that Nigerian banks were undermining the CBN’s new monetary policy.
At the time of filing this report, Nigerians were still using the old naira notes and felt reluctant to abide by the CBN rules owing to the fact that the new naira note and the old ones were still scarce.
Godwin Emefiele, Governor of the Central Bank of Nigeria, said the apex bank is committed to providing all necessary cash and logistics to ensure that the country’s general elections go off without a hitch.
Emefiele made the assurance during a meeting with Prof. Mahmood Yakubu, Chairman of the Independent National Electoral Commission (INEC).
CBN would honor cash commitments to INEC needed for the logistics of operating elections stating the CBN.
“I stand here to confirm that as of today, all foreign exchange needed to import those items has been provided and those items have been imported. So, it’s all part of our commitment.
“Now this issue of paying logistics for people who are going to be transporting election materials to wards, certainly I give it to you that because we regarded the INEC project as an urgent national assignment, it cannot fail.
“The CBN will not allow itself either to be used or to be seen as an agent that frustrated positive outcome of the election. So I give you the commitment that if in this case, after making your electronic payment you require some money to pay transporters, in this case, cash, I give to you that we will make it available.”
Emefiele stated that the CBN has assisted INEC in the storage of election materials and has also provided FX with to purchase of election equipment.
“Previously, we were involved in the storage of INEC election materials, as well as his involvement in using our armored bullion vans to transport election materials. We are pleased that we have not disappointed you during the course of this relationship, which is why you have returned this time.
“Aside from the issue of election material storage and transportation from CBN locations to your own specific or designated locations, I know that I visited your office just a few months ago.
“You raised the issue of how foreign exchange can be procured for you to import Bimodal Voter Accreditation System (BVAS) and other forms of election material that need to be imported and I gave you my word that foreign exchange will be provided for that purpose.”
The Central Bank of Nigeria (CBN) has been ordered by the Federal Capital Territory (FCT) high court to proceed with the redesign of the Naira in full and not the extend deadline.
In a decision made on Monday in the case with the file number FCT/HC/CV/2234/2023, the court barred the CBN from extending the time limit for using outdated naira notes.
Several banks, the CBN, and President Muhammadu Buhari were named as defendants in the lawsuit.
The CBN was instructed not to extend the deadline while the lawsuit is still being decided by Eleojo Enenche, the presiding judge of the FCT high court
“An order of interim injunction is hereby made restraining the defendants whether by themselves, staff agents, officers, interfacing banks or whosoever not to suspend, stop, extend, vary or interfere with the extant termination date of use of the old N200, N500, and N1000 bank note being 10th day of February 2023, pending the hearing and determination of the motion on notice,” the court held.
The continued shortage of the newly redesigned Naira have posed significant challenges for individuals and businesses, and it can be concerning when one’s savings are limited.
Nigerians are becoming worried and recalcitrant, breaking up ATM terminals. Some have gone naked inside the banking hall, crying and shouting. There are fears that the situation could turn into social unrest.
Checks by TechEconomy on Monday morning at some of the banks at Oshodi bus stop reveal that many Lagosians were already queuing at Fidelity, UBA, Stanbic, Access, Union, and Zenith banks. This has been the trend for over 2 weeks.
The deadline for the deposition of the new currency remains fixed at February 10, but the Central Bank of Nigeria (CBN) said that banks will still be available to collect the old notes until February 17. There are clues as to whether the dates will be extended any further.
Old Naira notes
“The lower class, especially in the rural areas, is bearing a huge part of the brunt,” Emeka Orji, a twenty-four-year-old bike man in Aba, told TechEconomy on a call.
“There are no Naira notes here, old or new, and POS operators have no cash.” Some people are trekking and using more bicycles. “It’s even tougher right now because a liter of fuel now costs N500 at filling stations,” he said.
CBN Looking Vindicated
Many Nigerians including notable public office holders have accused the Central Bank Governor, Godwin Emefiele, of sabotaging the process of distributing cash to Nigerians, lately. But, the reality on the ground shows that the narrative is shifting.
Remember, last week, the Speaker of the House, Femi Gbajabiamila, threatened to issue arrest warrants for Emefiele and the managing director of any commercial bank that did not honor the House’s invitation.
However, in his address to the ad hoc committee on Tuesday, Emefiele explained that he had been out of the country, thus failing to honor the House’s previous invitations.
The CBN Governor said the apex bank’s actions on the newly redesigned currency were consistent with international best practices and that the bank must maintain control over the currency in circulation in the country.
Emefiele, unequivocally stated that cash was made available to commercial banks. According to him, N1.4 trillion was in circulation in 2015, and by 2022, it would have risen to N3.33 trillion.
Commercial Banks Looking Like Culprits
As the situation worsens, the CBN takes another major step just to ensure that Nigerians have access to cash. It directed commercial banks on Thursday to begin issuing the newly redesigned Naira notes to customers over the counter, not just through the ATMs. However, the regulator stated that each customer can only be paid a maximum of N20,000 over the counter.
In addition, the CBN began monitoring the distribution of the new naira notes. They are meticulously touring several states to determine whether banks are truly making cash available. The findings reveal that commercial banks are the culprits.
The CBN discovered N4 million in new naira notes hoarded in some commercial banks in Ogun State last week.
The Central Bank apprehended some banks that have new notes in their vaults and forced them to upload them to their machines.
In another ugly situation – after receiving the funds for more than two weeks, the CBN discovered N6 million of the new Naira notes hoarded in Sterling Bank Plc’s Ado Ekiti branch on Bank Road, Ado Ekiti in Ekiti State.
In a trending video on social media, a man identified as Oluwole Owoeye, a Deputy Director of the CBN, was seen questioning bank officials about why they have not uploaded the funds into their Automated Teller Machines (ATMs), despite having six of the machines in place, while monitoring the distribution of the new naira notes in the state.
In addition, the CBN director announced a N1 million fine for each day the fund remained in the bank’s possession.
“I am currently at Sterling Bank on Bank Road as part of the new Naira notes compliance monitoring team,” the CBN official said.
Sterling Bank had N6 million in its possession but has yet to disburse any of it. They claimed they had yet to configure their ATMs. On the contrary, there were approximately 5 ATMs in the banking establishment.
“The Zonal Service Manager, Tunde Onipede promised that by 10:00 am tomorrow (Monday), because I told him that by 10:00 a.m. latest, I’d be here and I want to see the machine dispensing this money.
“What is the name again?” Olumide Owolabi (Service Manager, Ado) & Motunrayo Babayele. My name is Oluwole Owoeye and I am a Deputy Director of CBN.”
“This is the third week of ensuring strict implementation of our directive regarding the issuance of new notes,” a CBN senior staffer said. New notes are circulated in the economy by banks, agents, and super agents. We saw some people trying to hoard new notes, we forced them to upload them into ATM terminals, and others had poor cash management.
New Naira notes
“In our experience, commercial banks, not the CBN, should be blamed for scarcity.” We caught some of them, with new notes in their vault, and we compelled them to upload them to their machines. We told them that instead of trying to ration, upload the ones they have and contact your central cash management unit, which has direct access to CBN, for more.
“We came across instances of sabotage on the part of operators, we will take the case up and they will be dealt with appropriately.
“We came across one of them that couldn’t account for almost four million Naira of new notes, and appropriate sanction will be placed on them.”
Potential Social Unrest
Limited access to cash can have far-reaching consequences for individuals, communities, and society as a whole. This can result in protests, demonstrations, and other forms of public dissatisfaction.
It is critical for the CBN and financial institutions to maintain access to cash and other essential financial services, particularly during times of economic stress.
Already, disturbing videos have emerged online, and one of them showed a female bank official being attacked after the day’s work. The tire of her vehicle was removed while she screamed helplessly for help.
This sort of situation must be nipped in the bud before it escalates beyond control.
The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) believes that President Muhammadu Buhari’s administration and the Central Bank of Nigeria (CBN) should have issued N5,000 notes instead of redesigning the N200, N500, and N1,000 denominations.
In an interview on Monday in Abuja, NACCIMA director-general Sola Obadimu said that while the new banknote policy was commendable, it would have put less pressure on the masses if it had been implemented differently.
“If I were the CBN Governor, all I would have done was introduce the N5,000 note,” he said. “That would have helped mop up the money in circulation without the kickbacks we are getting.”
According to the Director-General, the hardships that Nigerians are experiencing as a result of the new policy would have been eliminated or reduced to the bare minimum.
According to the Director-General, the entire process would have been more cost-effective because “fewer amounts of bills would have been printed because it is a higher denomination.”
Mr. Obadimu stated that, aside from the ongoing swap, the naira’s strength against foreign currencies is a major concern, and it is disheartening to note that the naira is weak against foreign currencies, particularly the dollar and euro.
“Another thing is that our highest denomination, which is N1,000, is only worth two dollars at the official rate, and it is not too good for our image.” “There are €50 and €100 notes, and how much is a €100 note in naira?” stated the NACCIMA boss.
He added, “A euro is almost N1,000.” So, €100 is about N100,000. That is just a bill, and ours is worth just $2, which is not good for our image.’’
On the move to switch fully to a cashless policy, the director-general said it was a laudable initiative because “that is where the world is heading.” Digital economy is the new world order.”
The NACCIMA President, on the other hand, expressed reservations about the level of preparedness, particularly regarding internet infrastructure.
According to him, Nigeria has a long way to go toward achieving a cashless economy because the country’s internet infrastructure is weak, and Nigeria needs to develop its internet infrastructure, particularly in rural areas, to ensure a smooth transition.
The CBN Governor, Godwin Emefiele, set January 31 as the deadline for the old N200, N500, and N1,000 banknotes to expire. The deadline has been pushed back until February 10th.
RoutePay Fintech Limited has been granted a full operating license by the Central Bank of Nigeria to provide digital payment solutions in Nigeria.
RoutePay products and services are omnichannel—available across all channels of payment, including the web, mobile, POS, ATM, USSD, etc. It also has an array of products and services targeting different market segments based on demography, inclinations, and leanings.
With this full approval, Routepay is certified to have met all of the CBN’s requirements.
“We are pleased to inform you that the CBN has approved the issuance of a license to operate under the Payment Solution Service Provider (PSSP) in Nigeria,” the apex bank said in a letter to RoutePay titled “Payment Solution Service Licence Category” and dated January 12, 2023.
The CBN approval came after a thorough review and update, including an on-the-spot assessment of the fintech firm’s facilities to ensure that it met developments in the payment ecosystem. Last year, the CBN granted RoutePay Approval In Principle (AIP).
RoutePay is managed by a team of astute professionals with deep knowledge and understanding of Nigeria’s digital payment systems, according to Mr. Femi Adeoti (group managing director and former managing director of Inlaks). “The CBN approval validates the firm’s trustworthiness in the financial services industry,” Adeoti said.
Adeoti stated that Routepay is poised to ensure that “digital payment solutions are made possible and available in our environment without hassles,” citing the growing need for improved processes, services, products, and accessibility in the digital payment and financial technology industries.
Speaking about the approval, Routepay’s CEO, Abayomi Olomu, stated that the company is very intentional about driving digital payment transformation in a changing and demanding world. He goes on to say that the organization’s diverse products will strengthen connections between parties in the payment space by focusing on eliminating pain points and improving customer satisfaction.
According to him, pain points range from issues of channel reliability to specific issues of trust; he explains that some people will still refuse to use their cards for online payments due to concerns about fraud, etc., while others are concerned about the cost of using payment channels.
This, he said, could be partly responsible for the low rate of adoption despite all the awareness, products, services, government policies, and investment in this sector. According to him, in spite of the number of service providers in the financial technology and digital payments space, more than 85 percent of transactions are still done via cash.
“All these concerns and many others are what we have termed as pain points and RoutePay is all out to fix them in very innovative ways. We are deploying an intelligent customer experience survey system to capture feedback from users from time to time so as to constantly adjust our services, processes, and products to meet the users’ expectations.
“We are making digital payment products and services available to all and sundry regardless of their exposure, technology awareness, location, age, affluence, and education.
An employee of the Stanbic IBTC Bank has been detained in Abuja by the Independent Corrupt Practices and other Related Offenses Commission (ICPC) on suspicion of sabotage.
Azuka Ogugua, the ICPC spokesperson, stated that the move was a continuation of the ICPC’s crackdown on factors impeding attempts to make the new Naira notes available to the general population.
The bank employee was arrested for purposefully refusing to upload cash into the branch’s Automated Teller Machines (ATMs), even when there was a line of people waiting to use the ATMs at the Deidei Branch of Stanbic IBTC.
The statement reads: “When the ICPC monitoring team stormed the bank at about 1:30 pm on Friday to ensure compliance and demanded an explanation as to why all the ATMs were not dispensing cash, the team was informed by the branch’s head of operations that the bank just got delivery of the cash.
“However, facts available to the ICPC operatives indicated that the branch took delivery of the cash earlier around 11:58 am, and either willfully or maliciously refused to feed the ATMs with the cash.
“Against this backdrop, the ICPC team compelled the bank to load the ATMs with the redesigned Naira notes and ensured that they were all dispensing before arresting the culprit.
“The ICPC said investigations were still ongoing and the Commission will take appropriate actions as soon they are concluded.
“Similarly, seven Point of Sale (PoS) operators as well as a security guard were arrested during an ongoing exercise in Osun State for charging exorbitant commissions for cash.
“Investigations, however, revealed that they got the money from Filling Stations that collect new notes from fuel buyers, but they then resell the cash to the public at exorbitant rates.
“The arrested persons were helping the anti-graft commission with information to assist investigations and bust other syndicates involved in the hoarding and sales of the redesigned Naira notes,” the anti-graft agency said.
The International Finance Corporation (IFC) has announced a collaboration with Union Bank of Nigeria Plc to assist the bank in expanding lending to hundreds of firms in important sectors such as food, healthcare, manufacturing, and services in the country.
Union Bank will be able to increase trade financing and working capital lending to Nigerian businesses, including those whose cashflows have been strained by recent disruptions in global and local markets, thanks to the IFC’s $30 million loan.
The collaboration with Union Bank demonstrates IFC’s commitment to assisting Nigerian small firms in preserving and creating jobs, as well as gaining access to crucial inputs.
“As a bank, we are deeply committed to enabling success for SMEs. We understand the critical role of small businesses in leading Nigeria’s economy toward growth. This funding from IFC will enable us to extend financial relief to our customers during this difficult time. I am confident that the funds will help these businesses harness opportunities, and preserve jobs,” said Mudassir Amray, Managing Director and Chief Executive Officer of Union Bank.
“Strengthening supply chains and trade flows through working capital financing sets the stage for faster growth and economic diversification in Nigeria. IFC’s partnership with Union Bank is part of a wider strategy to ensure the flow of goods and services are sustained despite global trade disruptions,” said Kalim M. Shah, IFC Senior Country Manager for Nigeria, Liberia, and Sierra Leone.
The loan to Union Bank is made possible by IFC’s COVID-19 Emergency Response Working Capital Solutions Envelope, which was launched in 2020 to provide funding to existing IFC clients in emerging markets, who will then extend new loans to companies affected by COVID-19’s economic impacts.
Recent global economic disruptions, such as rising inflation and limited access to finance, have left many Nigerian businesses, particularly SMEs, grappling with supply chain shortages, increased costs of doing business, and limited trade growth.
IFC has an active investment portfolio of $2.3 billion in Nigeria – the second largest in Africa after South Africa – across sectors including agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.
The Central Bank of Nigeria (CBN) has authorized commercial banks to begin issuing the new Naira notes to Nigerians over the counter.
The apex bank stated that the new directive was intended to reduce the long lines of bank clients surrounding Automated Teller Machines (ATMs) around the country waiting to collect the new naira notes, which had been in short supply.
This was confirmed in a statement made by the CBN’s Director of Corporate Communications, Osita Nwanisobi, who stated that this is part of the efforts to help Nigerians who are having difficulty obtaining the new notes.
Over-the-counter payment is limited to N20,000.
“In accordance with this determination, the Governor, Mr. Godwin Emefiele, has authorized deposit money banks (DMBs) to begin the payment of the redesigned Naira notes over the counter, subject to a maximum daily payout limit of N20,000,” Nwasinobi said.
The CBN acknowledged the difficulty Nigerians have in withdrawing money from ATMs and expressed its commitment to making the procedure more seamless.
It also stated that it is working with competent agencies to punish racketeers of the new naira notes.
The apex bank in the statement added, “We have equally noticed the queues at Automated Teller Machines (ATMs) across the country and an upward trend in the cases of people stocking and aggregating the newly introduced banknotes they serially obtain from ATMs for reasons best known to them. Also worrisome are the reported cases of unregistered persons and non-bank officials swapping banknotes for members of the public, purportedly on behalf of the CBN.
“We wish to state unequivocally that, contrary to the practice of these unpatriotic persons, it is unlawful to sell the Naira, hurl (spray), or stamp on the currency under any circumstance whatsoever.
“For the avoidance of doubt, Section 21(3) of the Central Bank of Nigeria Act 2007 (As amended) stipulates that ‘spraying of, dancing or matching on the Naira or any note issued by the Bank during social occasions or otherwise howsoever shall constitute abuse and defacing of the Naira or such note and shall be punishable under the law by fines or imprisonment or both.
“Similarly, Section 21(4) states that ‘It shall also be an offense punishable under Sub-section (1) of this section for any person to hawk, sell or otherwise trade in the Naira notes, coins or any other note issued by the Bank.’”
Nigerians possessing outdated Naira notes may still deposit them at commercial banks after the deadline of February 10, according to the Central Bank of Nigeria.(more…)
![[Naira Scarcity] Bank Officials now Dress Casually to Work](https://techeconomy.ng/wp-content/uploads/2023/02/Bryant-1-2.jpg)
![[BREAKING] Naira Note: Abuja Court Restrains CBN from Extending Deadline](https://techeconomy.ng/wp-content/uploads/2022/12/cbn.jpg)
