The House of Representatives has expressed concern over the ongoing cash crunch in commercial banks across the country, calling on the Central Bank of Nigeria (CBN) to address the situation, which has disrupted economic activities and imposed significant hardship on citizens.
The call by the House is coming on the heels of the directive by Vice President Kashim Shettima to the CBN and commercial banks in the country to swiftly resolve issues of cash scarcity and arbitrary charges by point-of-sale (POS) operators.
The CBN last week issued a directive mandating Deposit Money Banks (DMBs) to prioritise efficient cash disbursement to customers both over the counter and through Automated Teller Machines (ATMs).
The directive, which took effect on December 1, 2024, forms part of the apex bank’s continued efforts to enhance currency circulation and address cash shortages across the nation.
In a motion brought under Matters of Urgent Public Importance by Hon. Uguru Emmanuel, the House highlighted the economic and social implications of the cash scarcity, which has left many Nigerians unable to access funds even for basic needs.
Hon. Emmanuel noted that while economic growth relies heavily on consumer spending and business investment, the persistent cash shortage has become a major impediment to these activities.
The lawmaker recalled that the CBN, in its policy directive of December 21, 2022, set cash withdrawal limits of N500,000 for individuals and N5 million for corporate entities.
However, he observed that commercial banks have largely disregarded this policy, often limiting cash withdrawals to as little as N10,000 or nothing at all.
He further raised alarm over the apparent disconnect between commercial banks and Point of Sale (POS) operators, who seem to have unlimited access to cash, often selling it at exorbitant rates.
The lawmaker warned that unless the CBN takes immediate action, the situation could worsen, especially with the approach of the festive season, leaving businesses frustrated and citizens plunged into deeper economic hardship.
In its resolution, the House mandated the Committee on Banking Regulations to investigate the cash crunch in commercial banks and report back within one week.
The House directed the CBN to urgently address the cash scarcity if it is not responsible for the shortage.
Our correspondents report that Nigerians are increasingly finding it difficult to get naira notes for their daily transactions.
The situation is more severe in rural communities, where access to banks and other financial transaction platforms is limited.
In towns and cities, Point of Sale (POS) operators have gone overboard by charging customers more than expected to give them naira notes.
“I paid N500 to get N10, 000 at the Jabi Park,” said Jennifer Samuel, a civil servant.
“I need cash to pay for transportation to Mararaba because the taxi drivers don’t accept transfer, but it is not fair for me to pay N500 just to get N10, 000,” she said.
Abdulmumini Ibrahim, a businessman, said he paid N800 to POS operator in order to collect N20, 000 cash.
“It is true that cashless society is the way forward for any society that wants to grow but Nigeria is not ripe for that.
“Government must invest in infrastructure in order to convince people to accept the new norm. For now, they should make more cash available,” he said.
Apex bank tightens noose on fintechs
The Central Bank of Nigeria (CBN) has fined two of the country’s most prominent unicorns, Moniepoint and OPay N1 billion each in the second quarter of 2024, sources with direct knowledge of the matter told TechCabal.
The sources also confirmed that several other fintech companies were penalised, but that the two firms were the hardest hit, following a routine CBN audit of the fintech sector, which revealed compliance issues.
Daily Trust could not independently verify the claim despite many efforts.
When contacted, OPay said no such levy has been imposed on it.
Two sources familiar with the development told TechCabal that at least four other fintech companies were similarly penalised, though the details of these fines remain unknown.
The CBN has increasingly relied on fines to enforce regulatory compliance.
In 2023, Nigerian banks paid a combined N678 million in penalties. In October 2024, the CBN and the Securities and Exchange Commission (SEC) imposed a N1.5 billion fine on ten commercial banks, including Zenith and GTBank, for various infractions in the first half of the year.
Until recently, Nigeria’s rapidly growing fintech sector largely operated without CBN interference. However, the rapid expansion of fintechs like OPay and Moniepoint, which now serve millions of users, has invited greater scrutiny.
OPay, for instance, claims a customer base of around 40 million, while Moniepoint, which processed N5.2 billion transactions in 2023, does not disclose specific customer numbers but is similarly large.
According to the report by TechCabal, beyond licensing, the CBN has also expressed concerns about the fintechs’ compliance with Know Your Customer (KYC) processes.
In April 2024, the central bank imposed a two-month ban on customer onboarding for several fintech companies, including Kuda Bank and Palmpay, citing non-compliance with KYC standards. The ban forced fintechs to overhaul their onboarding procedures and commit to improving their compliance measures.
In a statement to TechCabal, OPay said: “We categorically refute the claims that OPay Digital Services was fined by the Central Bank of Nigeria to the tune of N1 billion for regulatory infractions. These claims are entirely false.”
When Daily Trust reached out to the North-east Regional Manager of Moniepoint, Alamin Jamil, he said: “I have seen the story on some online platform and it appears false to me. I don’t have all the details but I don’t think it is true.”
He promised to get back to our reporter once he gets the true position of things.
However, a senior management source with Moniepoint who prefers anonymity confirmed the fine but was uncertain about the actual amount.
CBN’s Acting Director of Corporate Communications, Hakama Sidi Ali, could not be reached for comment as of press time.
[DailyTrust]