Banks ration cash as Naira scarcity persists
December 12, 2023
Banks ration cash as Naira scarcity persists
Bank customers’ agony over the prevailing Naira scarcity increased, yesterday…
By Babajide Komolafe, Nkiru Nnorom, Rosemary Iwunze, Elizabeth Adegbesan, Providence Ayanfeoluwa, Luminous Jannamike, Victoria Ojeme & Ukanwa
Bank customers’ agony over the prevailing cash scarcity increased, yesterday, as more banks resorted to rationing cash withdrawals while Point of Sale Operators, PoS, operators, hiked transaction fees by 100 per cent.
Meanwhile, the Central Bank of Nigeria, CBN in a move aimed at ameliorating the situation, suspended charges for cash withdrawals above the regulatory limits of N500,000 for individuals and N3 million for corporate account holders. The CBN said that the suspension of the charges would last till April 30th next year.
Suspension of charges for large cash withdrawals
Announcing the suspension in a circular to banks entitled, ‘Re-Processing Fees on Cash Deposit’, the acting Director, Banking Supervision, CBN, Dr. Adetona Adedeji, said: “Please recall the processing charges imposed on cash deposits above N500,000 for individuals and N3,000,000 for corporates as contained in the “Guide to Charges by Banks, Other Financial Institutions and NonBank Financial institutions’ issued on December 20, 2019, under reference FPR/DIR/GEN/CIR/07/042.
“The CBN hereby suspends the charging of processing fees of two percent and three percent previously charged on all cash deposits above these thresholds with immediate effect. This suspension shall remain in effect until April 30, 2024.
“Consequently, all financial institutions regulated by the CBN should accept all cash deposits from the public without any charges going forward.”
Banks ration cash withdrawal
Vanguard’s visits to bank branches in Lagos and Abuja showed more customers experienced difficulty accessing cash as the ATMs in most of the bank branches did not dispense cash while the banks imposed limits on cash withdrawal in a bid to ration the available cash.
Vanguard’s findings indicated that there has been a short supply of cash to the banks from the apex bank, prompting the banks to reduce the amount disbursed both via the Automated Teller machines, ATMs, and Over-the-Counter.
Like the beginning of the year, when Nigerians faced biting cash scarcity, banks now prioritise customers holding accounts with them, while rationing available cash to make it get to as many customers as possible.
While some still maintain the N100,000 daily withdrawal limit in tranches of N20,000 through ATMs, others have since reduced the amount dispensed through the ATMs.
Also, POS agents who spoke to Vanguard confirmed the unavailability of cash at the banks, saying that they hardly get the amount they requested from the banks in the last one month.
When our correspondent visited a new generation bank located on Old Ojo Road, off Badagry Expressway, Lagos, she was told that she could withdraw a maximum of N50,000 in the banking hall.
At the same branch of the new generation bank, our correspondent discovered that only two out of the four ATMs were in use. While customers of the bank are allowed to withdraw up to N40,000 from the ATM in batches of N10,000, non-customers could make withdrawals for up to N20,000 but in batches of N5,000.
A staff of the bank, who works in the marketing unit, told Vanguard that the challenge was not limited to the bank alone, saying “We started experiencing this shortage at the beginning of this month (December). Besides the fact that customers no longer make deposits as much as they used to, we also have a short supply from the CBN.”
At 4pm., yesterday, a customer of an old generation bank, who made a withdrawal from the bank’s ATM told our correspondent that the withdrawal limit for non-customers had further been reduced to N3,000 and further down to N1,000 as at the time she left the ATM gallery.
At another second-generation bank, located at Old Ojo Road, all the ATMs were out of use.
Checks by our correspondent revealed that customers, who visited the bank earlier in the day were availed of N50,000 maximum withdrawal in the banking hall.
Echoing the same sentiment as the staff of a new generation bank, a security personnel at another new generation bank, who confirmed to Vanguard that the ATMs have not been loaded in the last one week due to the cash scarcity.
A staff of a new generation bank around Abule-Ado axis on Badagry Expressway told Vanguard that the bank still allows N100,000 daily withdrawal limit even through the ATM for their customers. Withdrawal limit at the banking halls, according to him, depends on cash availability and the time of the day the customer visits the bank. For non-customers of the bank, the withdrawal limit was set at batches of N5,000 while the N35.00 withdrawal charges still apply for each withdrawal.
Explaining, he noted that the scarcity was a yuletide occurrence in the banking system, but said that the intensity of the scarcity worsened this year and it’s akin to what happened earlier in the year.
The story was, however, different at one of the generation banks situated around the same axis as customers could withdraw as much as N200,000 over-the-counter.
Vanguard checks also showed that only one ATM out of the ATMs in the bank were operational as at the time our correspondent visited.
Vanguard visit to another branch of a new generation bank at Igando, Lagos State, showed that the ATM was surrounded by bank customers, who could only withdraw N20,000 as customers and N10,000 per withdrawal for non-customers.
Mrs. Omotosho Vivian, a customer, said: “God help us. These people have started again. We were going through hell during this period last year. We have been here for hours.
“They just loaded the ATM now and it is only one out of four ATMs that is serving this huge crowd you are seeing.
“I am very tired. I have been to other banks but none of their ATMs are dispensing cash.”
A branch of an old-generation bank at Igando bus stop had a crowd sitting and waiting at the ATMs to be loaded with cash.
Another bank customer, Mrs. Hannah Martins said she has been waiting for over 30 minutes and the ATMs have not been loaded with cash.
“I have been patronising this bank since Saturday with no luck in withdrawing cash. Today, I have waited for 30 minutes yet they have not loaded the ATMs with cash.
“I am very exhausted and will be leaving any minute to pick my kids from school. I really don’t know what is going on.
“The security men are saying there is no cash. This was the same scenario we experienced last year. We are just here unable to have access to our money. What is the benefit of banking when we collect our money through suffering?”
A visit to a new-generation bank in Igando revealed that none of the ATMs was loaded with cash. Customers could only make withdrawals over the counter.
At another old-generation bank located in Kirikiri, Apapa, customers, who wanted to withdraw large amounts of cash, were seen complaining, as they lamented that they were only allowed to withdraw N10,000, which could serve their needs for a day.
Also at the branch of a ngew generation bank located inside the Alaba International market, Ojo, Lagos, customers were only allowed to withdraw N10,000.
Vanguard visit to some new generation banks in the Akowonjo area of Lagos State, showed that the ATM was paying N20,000 to customers and N10, 000 to non-customers.
However, the bank was paying N10, 000 over the counter, OTC to customers withdrawing via withdrawal slip or PoS machine inside the bank.
When Vanguard enquired why customers were receiving N10, 000 OTC, one of the front desk personnel responded rudely that that was what the bank was doing.
Also, a visit to branch of a new generation bank at Apapa Wharf, yesterday, showed that the unavailability of cash degenerated over the weekend.
The bank was paying N20,000 to corporate account holders and N10,000 to individuals, who wanted to withdraw their money.
Further findings showed that the bank programmed its ATMs in a way that customers could not exceed the maximum daily withdrawal limit of the bank.
A customer of a new generation bank, who spoke with Vanguard at Apapa Wharf, Mrs. Ngozi Chukwudi, said that she went to the bank with the hope of withdrawing over N200, 000 because it is a corporate account.
She said her request was turned down and was asked to make a request of not more than N20, 000.
Chukwudi said: “We wanted to use the money urgently to sort out an urgent need, but when they told me I cannot do more than N20, 000, I was discouraged and had to go back to report back to the people I am working for.
“We took another alternative, even though it was not favourable, we had no option.”
Abuja residents groan over escalating cash scarcity
The escalating Naira scarcity in banks has left residents of the Federal Capital Territory grappling with frustration and inconvenience.
Vanguard reports that bank customers and even POS, operators in Abuja have been struggling to withdraw cash from ATMs and were often faced with long queues and limited services at banking halls.
Our correspondent who visited some old and new generation banks in Nyanya, and another new generation bank in Mararaba, observed numerous complaints lodged at these banks by customers over the uneasy situation they find themselves in.
Our correspondent noticed that a lot of the bank branches had ATMs that were not dispensing cash, and there were extremely long lines inside the banking halls.
Some of the bank customers who spoke to our correspondent said that they had been forced to make multiple visits to different banks in the hopes of obtaining some much-needed cash.
“I have been to three different banks today and none of them has enough cash to give me. It’s very frustrating. We can’t even access our money when we need it the most,” said Bola Adeyemi, a civil servant residing in Abuja.
Another customer at an old generation bank in Nyanya, Abuja, Eno Effiong, said: “It’s frustrating that we’re living in the capital city and still facing such cash scarcity issues. I came to the bank to withdraw N15,000 but I was told I could only get N10,000. I mean, isn’t Abuja supposed to be one of the most developed and well-equipped cities in Nigeria? It’s high time the government acted upon this and ensured that banks have enough cash to cater to our needs.”
A Nasarawa State Polytechnic student, Apindo Patience, said: “I just don’t understand why they can’t manage the cash flow properly in the banks. It’s not like Abuja is a small town with limited resources. The inconvenience caused by this scarcity is undeniable, especially when we have important bills to pay and can’t access the desired amounts of money from our own accounts.”
An Abuja trader, who identified herself as Genevieve Johnson, said: “The lack of cash in the banks has definitely made life more difficult for us. Even simple tasks like grocery shopping or paying for transportation have become a hassle when you can’t withdraw the required cash. It’s causing unnecessary stress and inconvenience in our daily lives.”
Also, a POS operator, Asmau Usman, said: “Since yesterday, I have been struggling to get money. I have only been able to gather small. Now, we don’t collect N100 for N5000 again, it’s N150. This is because banks are giving little or nothing.”
Another POS operator, Emeka Ugwu, said: “I sent my boy to some money in two different banks since morning and he is not yet back. The last time I called him, he was only able to get N10,000. For now, everything has increased and Nigerians are going through hell. People spend hours waiting in long queues, only to be told that there’s not enough cash available. It’s a pity.”
Except for one bank employee, who casually and anonymously mentioned that the bank cannot provide cash exceeding N20,000, all attempts to obtain comments from other bank officials were unsuccessful as they refused to comment on the matter.
At another old-generation bank located at Mpape in Abuja, customers were restricted to a withdrawal limit of N20,000. These limitations have imposed a substantial strain on Nigerians needing access to cash.
PoS agents hike transaction fees
Some point of sales operators in Nigeria have announced new service charge.
Some of the operators said that the increase in service charges was to ensure survival of their business.
Speaking to one of the operators, Miss Gloria Chima, said, for withdrawals up to N5000, Nigerians would pay a service charge of N200 while for withdrawals of N10.000 customers would pay service charge of N400.
Gloria said, “I don’t want what happened last time to happen again, where people were sleeping in front of banks for three to four days.”
Another operator, Miss Tope Adekunle, expressed fears of not travelling to see her parents during Christmas.
“As a PoS operator, if I cannot withdraw money in the bank to give to customers, how then will I see money to travel to my village or how will other people out there see the money to even eat with their families.”
Another PoS agent, who simply wished to be known as Mama Precious, revealed that she had to plead with bank officials to withdraw N30,000 from the bank’s bulk room.
Recounting her ordeal, she highlighted the hardships local cash agents were experiencing in order to meet demand.
“I had to beg the bank officials in the bulk room before they grudgingly handed over N30,000,” she narrated.
In reaction to the cash shortage, PoS operators along Ajegunle road in Mpape, Abuja, have doubled their charges. Now, they charge N200, N400, and N800 to dispense N5,000, N10,000, and N20,000 respectively, a significant hike from the N100, N200, and N400 rates as of last weekend.
Mr Femi Akande, a PoS agent in Igando, Lagos State, said he sourced for cash through some traders he had a relationship with to sustain his business since last week.
“The cash scarcity was experienced in areas like the Island, Mainland and outside Lagos since last month.
“It is telling on us as the festive season is drawing near and people are requesting for huge cash withdrawals daily.
“My bank could only give me N200,000 per day as an agent. I have to source for cash from some of my friends, who are traders and deal mostly with cash transactions.
“Some people are now selling cash just like January this year when there was cash scarcity.
“This has doubled transaction fees for customers.”
Also, Mr. Abraham, who lives in Magbon axis of Lagos Badagry expressway, added that a few PoS operators have started taking advantage of the naira rationing to increase charges.
How are banks responding
Each bank’s strategy to deal with the cash crunch may differ based on regulatory guidelines, and customer behaviour, but the goal remains to strike a balance between meeting cash demands and promoting digital payment adoption to maintain efficiency and prevent potential cash shortages.
A confidential source from an old generation bank in Mpape, Abuja, conceded that the public’s frustration was palpable as the current situation hinders daily financial operations and impacts the overall economy.
However, he assured that the commercial banks were working diligently with the CBN to ensure an adequate cash supply to meet customer needs.
“The CBN is partnering with us (commercial banks) to identify and address these underlying issues to prevent future cash shortages,” the source stated.
On the specific measures the bank had undertaken to adapt to the increased cash demand, he shared, “We have escalated the frequency of cash pickups from the CBN and are collaborating with PoS operators to streamline and optimise cash distribution.
“Also, we have temporarily adjusted withdrawal limits to manage liquidity and are encouraging online transactions to reduce the reliance on physical cash.”