By Milcah Tanimu
As the scarcity of Naira continues to plague Nigeria, bank customers are facing heightened frustration, with several banks resorting to rationing cash withdrawals. Simultaneously, Point of Sale (PoS) operators have raised transaction fees by 100 percent. In response to the growing crisis, the Central Bank of Nigeria (CBN) has taken steps to alleviate the situation by temporarily suspending charges for cash withdrawals exceeding regulatory limits.
**CBN’s Response to Cash Crunch**
In a circular titled “Re-Processing Fees on Cash Deposit,” Dr. Adetona Adedeji, the acting Director of Banking Supervision at CBN, announced the suspension of processing charges on cash deposits exceeding N500,000 for individuals and N3 million for corporate account holders. This suspension is effective immediately and will last until April 30th, 2024. The move aims to encourage financial institutions to accept cash deposits without imposing charges on the public.
**Banks Rationing Cash Withdrawals**
Vanguard’s investigations at various bank branches in Lagos and Abuja revealed an exacerbation of cash scarcity, leading to banks imposing limits on cash withdrawals and prioritizing account holders. ATMs in many branches were not dispensing cash, forcing banks to reduce the amounts distributed over-the-counter and through ATMs. Some banks maintain a daily withdrawal limit of N100,000, while others have further reduced the amount dispensed through ATMs.
**PoS Operators React to Cash Shortage**
In response to the cash shortage, PoS operators have increased service charges to ensure the survival of their businesses. Withdrawal service charges of N200 for up to N5,000 and N400 for N10,000 have been reported. PoS operators cite difficulties in obtaining cash from banks, impacting their ability to provide services to customers.
**Customers’ Struggles and Inconvenience**
Customers across the country, including Abuja residents, expressed frustration and inconvenience due to long queues, limited cash services at ATMs, and withdrawal restrictions at banks. Some customers reported making multiple visits to different banks in a futile attempt to access needed cash, highlighting the strain on daily activities and the overall impact on their lives.
**Banks’ Response Strategies**
Each bank is adopting different strategies to cope with the cash crunch, adjusting withdrawal limits, and encouraging online transactions to mitigate reliance on physical cash. Banks are working closely with the CBN to address underlying issues contributing to the cash shortages, with a focus on preventing future disruptions in liquidity.
The persistent cash scarcity poses challenges to both banks and customers, emphasizing the need for collaborative efforts between financial institutions and regulatory bodies to find sustainable solutions.
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