Nigerians suffer naira scarcity & cash crunch as banks now ration cash withdrawals

Strong indications emerged yesterday that the agonies and pains of recent Naira redesign are here again as Nigerians have continued to lament another round of cash crunch in banking halls, ATMS and other outlets across the country.

This is happening despite a recent Central Bank of Nigeria clarification that the deadline for the withdrawal of old naira currency notes from circulation earlier scheduled for December 31, 2023 has been postponed indefinitely, reports Daily Sun.

The apex bank in its circular stated that the old and new notes would be allowed to circulate side by side pending when its capacity to print enough new notes is enhanced.

However prior to the apex bank’s shift in date, there was anxiety in some quarters that unscrupulous cash speculators were stockpiling new naira notes with a view to trading them once the old notes are withdrawn from circulation.

Despite the CBN policy statement, Daily Sun investigations in parts of the Lagos and Abuja metropolis revealed that most commercial bank branches are now being compelled to reduce the volume of cash withdrawals by customers per time.

Financial industry experts had also linked the current development with the Central Bank of Nigeria (CBN) directive to customers to link their Bank Verification Number (BVN) or National Identity Number (NIN) to their accounts.

According to the circular signed by the bank’s Director, Payment System Management Department at the CBN, Mr Chibuzo Efobi, and Director, Financial Policy and Regulations Department, Mr Haruna Mustapha, all individual existing and new tier 1, 2 and 3 accounts/wallets must have BVN or NIN. It further stated “Existing unfunded individual Tier 1 accounts without BVN or NIN would be placed on “Post No Debit or Credit” immediately. Hence, all customers must link BVN and NIN by March 1, 2024”.

As a result of this directive, the consensus was that some customers, especially wealthy ones, would likely panic and besiege commercial banks and the National Identity Management Commission offices and centers.

When Daily Sun visited some banks in Ajah, Jakande and Isolo areas in Lagos on Wednesday, only to discover that some banks were struggling to pay customers who who came to withdraw their money. When asked why some customers could not get the required cash they wanted, a bank staff member who spoke on the condition of anonymity, said, “Right now we are being is forced to reduce cash transactions to customers because the demand is high at the moment. We do not want it to get to a level when we cannot pay customers any monies when they want to withdraw.”

At Isolo and Jakande, Point of Sales (PoS) Operators who spoke to Daily Sun, said they might resort to charging customers higher than approved rates because of the scarcity of cash and demand pressures as they did during the ill-implemented Naira redesign earlier in the year.

Oluchi Chibuike, a PoS operator said, “The banks are not giving us sufficient volume as we want and sometimes, you have to know someone who is ready to ration the cash at a hefty rate if you want your own business to boom. I went to a bank for instance and I wanted N100,000 but they refused to give me that and instead gave me N40,000 over the counter”.

Daniel Egbuka, another operator, said, “It may not be as bad as it was last year but it could degenerate into that if it is not handled well.

If this heats up, then PoS operators may be forced to sell at higher rates to customers if banks do not meet up with operators’ demand for cash”.

Further investigations revealed that automated teller machines (ATMs) of some of the banks were restricted to dispensing only N5,000-N10,000. Reacting to the development, economic stakeholders are advocating for the CBN to consider extending the deadline for implementing its recent directives to banks, requiring customers to link their BVN and NIN to their bank accounts.

Their concerns center around the potential delay from some customers in adhering to the directive, fearing that many might wait until the deadline approaches before rushing to their banks to update and regularize their accounts.

In an interview monitored by Daily Sun, the newly-elected national President of the Association of Mobile Money and Bank Agents in Nigeria, Sarafadeen Fasasi, said the implementation of the directive, as well as the time attached to it, would cause unnecessary hardship on bank customers.

He said, “We agree that all bank accounts must have the minimum KYC, however, our challenge is with the urgency with the implementation and that has always been our own challenge with the Central Bank of Nigeria. We think the issue of KYC shouldn’t be an issue that should generate so much controversy and it should be gradual. It should not be an emergency. “

Fasasi urged the CBN to meet with stakeholders and solve all the access issues. He said, “This can be spread over a year for customers to regularise. You don’t need to freeze their accounts; you only need to instruct your service providers that they should link the NIN of their database. Retrieve their customers’ NIN from NIMC and retrieve their BVNs from NIBSS and marry the two. You don’t need to inflict punishment on the masses of the people.”