By Kingsley Omose
With
the implementation of the Cashlite or Cashless policy with effect from January 1, 2012 the alleged subsidy on cash transactions which the Central Bank of Nigeria claims runs into hundreds of billions of Naira yearly will be withdrawn in some selected States across Nigeria including Lagos which is home to 65% of commercial transactions in Nigeria.
The principal complaint of the deposit money banks is that handling
cash which is supposed to be their main business now constitutes 30%
of their operating costs, which in turn results in the high rate of
interests these banks charge for loans and other facilities they
extend to their customers, which in turn affects funding of the real
sector of the economy.
To drive home its determination to enforce the Cashlite or Cashless
policy and supposedly encourage the utilization of electronic payment
systems, CBN has directed banks to strictly enforce the penalties for
exceeding the limits on cash withdrawals or lodging by individuals and
corporate which have been fixed at N150, 000 and N1, 000, 000
respectively
With banks given authorization to deduct N100 for every N1000 above
N150, 000 withdrawn or lodged by individual customers, and N200 for
every N1000 above N1, 000, 000 withdrawn or lodged by corporate
customers, prices of goods and services conducted above the cash
thresh hold will increases by 10% and 20% respectively.
While the CBN and banks are poised to kick start the implementation of
the punitive charges for conducting cash transactions with effect from
January 1, 2012, the same cannot be said regarding the widespread
deployment of the electronic payment solutions that should keep
commercial transactions in Lagos
State on an upswing.
Come to think of it, the same cannot also be said about the efforts
being made by the CBN, banks and other interested parties in
enlightening Lagosians and residents of other states being used as the
guinea pigs to test run the Cashlite of Cashless policy before its
full adoption in Nigeria by July 1, 2012.
When the removal of the supposed subsidy on handling cash by banks is
taken together with the proposed removal of fuel and fertilizer
subsidy, additional tariff on wheat and rice, ban on the importation
of cement, increase in electricity charges, reintroduction of toll
collection in some Federal Highways across Nigeria, 2012 is going to
be a challenging year.
To help the mass of Nigerians who are going to be affected by the
Cashlite or Cashless policy, I have complied ten simple ways of
minimizing the effect of this new tax imposed by CBN, which said steps
are by no means perfect but will go a long way towards enabling us
navigate the stormy waters of 2012 and beyond.
The first step is to realize that between January and June 2012 the
majority of States in Nigeria
will not be applying the Cashlite or
Cashless policy, so you can carry on your withdrawal and lodging of
cash above the approved limits in branches of your bank in cities,
towns and villages outside the pilot project areas.
Second, you can convert your Naira to USD, GBP, YEN, EURO, CFA, CEDI
and price your goods and services in these foreign currencies, as the
burden on handling cash transactions above the approved limits only
applies to the Naira and not foreign currency, and you can even follow
it up by opening a domiciliary account with a deposit money bank.
Third, since the limit for individual and corporate cash
lodging/withdrawal is N150, 000 and N1, 000, 000 respectively, you can
open more corporate accounts with deposit money banks either through
registering a business name or incorporating a limited liability
company which increases your cash handling limits without penalty by
N850, 000.
Four, you can also decide to open more individual or corporate bank
accounts with different deposit more banks, and other than the trouble
of going to these different banks to cash or lodge money, it can be
business as usual for cash lovers who can withdraw N150, 000 from two
or more accounts in different banks.
Five, you can decide to boycott the deposit money banks entirely and
join up with millions of Nigerians who operate in the informal sector
of the economy and have nothing to do with bank transactions, and
there is a strong possibility that informal institutions will spring
up in the informal economy to fill the gap of handling cash on behalf
of desperate Nigerians.
Six, you can sue your bank in a court of law for penalizing you for
withdrawing or lodging cash above the approved limit as the Cashlite
or Cashless policy is what it claims to be, a simple policy that has
no legal backing, and since the legal duty of CBN is to issue and
print the Naira as a legal tender, penalizing Nigerians for using the
Naira is certainly illegal.
Seven, you can decide to cut down on your spending by restricting
yourself daily to goods and services that cost N150,000 if an
individual, and N1, 000, 000 if a corporate organization, meaning you
will have more disposable cash in your savings, and this will be wise
in the face of global economic uncertainties.
Eight, you can go and open bank accounts in the names of other members
of your family or if a corporate entity, incorporate additional
subsidiaries with their own bank accounts even if these accounts have
different signatories, the goal being to be able to pool up as much
cash as is needed to lubricate the wheels of business in Nigeria.
Nine, if you are already a lawyer or training to be one, you can
concentrate on electronic payment transactions, a policy that has no
legal backing, even lacking laws to deal with frauds, defaults, and
dispute resolutions that are sure to spring up in their millions when
electronic money is expected to replace cash where goods and services
are to be exchanged.
Ten, if all else fails; you can buy bank shares to profit from the
huge dividend pay-out they will make from raking in billions of Naira
from penalizing individuals and corporate organizations withdrawing or
lodging cash above the approved limits, a step which is guaranteed to
revive the fortunes of the Nigeria Stock Exchange.
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