The anguish of bank customers over the ongoing cash scarcity reached new heights as more banks, grappling with the situation, resorted to rationing cash withdrawals.
Concurrently, Point of Sale (PoS) operators exacerbated the challenge by hiking transaction fees by 100 per cent.
In response to the escalating crisis, the Central Bank of Nigeria (CBN) implemented a temporary measure aimed at alleviating the situation.
Charges for cash withdrawals above regulatory limits—N500,000 for individuals and N3 million for corporate account holders—were suspended until April 30th next year, according to a circular titled ‘Re-Processing Fees on Cash Deposit.’
Suspension of Charges for Large Cash Withdrawals
Dr. Adetona Adedeji, the acting Director of Banking Supervision at the CBN, announced the suspension of processing fees on cash deposits above specified thresholds.
The move was a response to the pressing need to mitigate the cash scarcity situation that has gripped the nation.
“Consequently, all financial institutions regulated by the CBN should accept all cash deposits from the public without any charges going forward,” stated the circular.
Banks Ration Cash Withdrawals
Vanguard’s investigations into bank branches in Lagos and Abuja revealed the severity of the cash scarcity, leading to banks limiting cash withdrawals.
Automated Teller Machines (ATMs) in many bank branches failed to dispense cash, while banks imposed withdrawal limits to efficiently distribute the available cash.
The shortage of cash supplied to banks from the apex bank prompted reductions in disbursements via ATMs and Over-the-Counter services.
Banks, echoing the challenges faced at the beginning of the year, prioritized account holders, rationing cash to reach as many customers as possible.
While some maintained the N100,000 daily withdrawal limit in tranches of N20,000 through ATMs, others decreased the amount dispensed.
Additionally, PoS agents experienced cash unavailability from banks, hindering their operations.
Vanguard’s visit to various bank branches painted a picture of frustrated customers facing challenges accessing cash.
Some banks imposed maximum withdrawal limits both at ATMs and within banking halls, contributing to long queues and discontent among customers.
Cash Scarcity Challenges in Abuja
The cash scarcity challenge extended to Abuja, where bank customers and PoS operators struggled to withdraw cash from ATMs, encountering long queues and limited services at banking halls.
Complaints from customers highlighted the inconvenience and frustration caused by the scarcity, with some making multiple visits to different banks in a bid to obtain much-needed cash.
PoS Operators Respond to Cash Shortage
Point of Sale operators, facing the impact of the cash scarcity, announced increased service charges to sustain their businesses.
Withdrawals up to N5,000 incurred a service charge of N200, while N10,000 withdrawals attracted a service charge of N400.
Fears loomed among PoS operators about the survival of their businesses, and the increased service charges aimed at preventing a repeat of past situations where people queued for days at banks due to cash scarcity.
Banks’ Responses and Collaborations with CBN
Various banks adopted distinct strategies to navigate the cash crunch, adhering to regulatory guidelines and adapting to customer behavior.
While each bank’s approach may differ, the common goal is to strike a balance between meeting cash demands and promoting digital payment adoption for increased efficiency.
A confidential source from an old-generation bank acknowledged the public’s frustration and emphasized that commercial banks were actively collaborating with the CBN to address underlying issues causing cash shortages.
Measures include increased frequency of cash pickups from the CBN, collaboration with PoS operators to optimize cash distribution, temporary adjustments to withdrawal limits, and encouragement of online transactions to reduce reliance on physical cash.
As the situation unfolds, the collaborative efforts between banks and the CBN are expected to bring relief to bank customers grappling with the repercussions of the ongoing cash scarcity.
