Lawmakers attack cash withdrawal limit, summon CBN’s governor

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CBN governor, Godwin Emefiele Lawmakers, House of Reps, cash withdrawal limit, Nigeria
CBN governor, Godwin Emefiele

Lawmakers attack cash withdrawal limit, summon CBN’s governor

Nigeria’s House of Representatives and the Central Bank of Nigeria (CBN) have disagreed over the cash withdrawal limit policy ahead of the release of some redesigned denominations of the Naira notes.

The CBN memo

On November 26, the bank unveiled new 200-, 500- and 1000-naira bills ahead of the December 15 launch date, citing massive hoarding of banknotes with over 85 per cent of currency in circulation outside the banks’ vaults, as one of its reasons.

And in a memo issued Tuesday and signed by CBN’s Director Banking Supervision Haruna Mustafa, the apex bank directed all banks and other financial institutions to ensure over-the-counter cash withdrawals per week by individuals and corporate entities do not exceed N100, 000 and N500, 000, respectively.

Consequent upon this, the CBN directed that only N200 and lower denominations should be loaded into banks’ ATM machines.

Reps dissatisfied

But dissatisfied with the apex bank’s decision, the House of Representatives Thursday summoned CBN governor, Godwin Emefiele to appear before it next week Thursday.

The decision followed a motion of matter of urgent public importance moved by Aliyu Magaji Dau (APC Jigawa) on Thursday during plenary.

Raising concerns over the announced policy, Chairman of the Committee on Power, Hon. Aliyu Magaji Da’u in a motion said: “My heart bleeds for the people who voted us into power, we seem to come to Abuja and forget about them and this is my opinion,” recalling how in about a month ago, Nigerians woke up to hear that there will be new currency notes.

In the motion, Da’u said small businesses, “which are the major drivers of the economy, depend on cash for transactions,” adding that the owners of these businesses would be negatively impacted by this policy.

He said: “Although the Central Bank of Nigeria has the right to issue monetary policies on the Nigerian economy to be able to guide and direct the economy to the right part of recovery and growth, however, the new policy rolled out by the Central Bank of Nigeria (CBN) will definitely have a negative impact on the already dwindling economy, and further weakens the value of the Naira as Nigerians may resolve to use dollars and other currencies as a means of trading and thus further devalue Naira and weakens the economy.”

The lawmaker further observed: “It is good to have a cashless policy but we seem to be borrowing ideas and policies from other countries that are far ahead of us. We are comparing ourselves with the United States and the United Kingdom. These people are far ahead of us. We will get there one day but this type of policy disturbs the people that voted for us.”

In his contribution, Chairman House Committee on Tertiary Education, Hon.  Aminu Suleiman said allowing the policy might be “an exit board for many of us if we allow this radical decision to succeed and therefore my voice must be heard on this.

“There are several government Chief Executives in this country that have outlived the essence of their positions because I cannot simply understand how we can wake up one day and introduce this draconian approach to businesses…”.

Minority Leader of the House, Hon. Ndudi Elumelu, who offered a contrary opinion, however, said the policy would reduce incidences of kidnapping and related vices, saying “if you go to the communities today, they will ask them to contribute money, is because there is cash everywhere. If you want to stop banditry, make it impossible for them to have cash, there should not be available cash for them.”

Another twist was added by Hon. Mark Gbillah, who in citing section 8(4,5) of the CBN Act pointed out that the apex bank’s governor is required to consult with the parliament over certain policies, saying the procedure was breached.

When asked by Speaker Femi Gbajabiamila to state whether the House Committee on Banking and Currency was briefed on the recent development, a member of the panel, Hon. Mela Danzariya, said for his over three year-stay and being a member of the committee, “I have never seen the CBN Governor giving us any report. For four times, he has increased interest rate for loaners.”

House Resolution

In its resolution, the House directed Emefiele to appear before it next week Thursday to explain the impact and significance of the new policy.

The lawmakers also urged the suspension of the decision pending the outcome of the expected meeting with the House on the compliance of the apex bank with relevant sections of the CBN Act and other relevant laws.

Affirming the House’s resolution, Speaker Gbajabiamila said Emefiele is expected to face the House next Thursday, unless he (Speaker) is able to obtain the understanding of Senate President Ahmad Ibrahim Lawan for a joint session on the matter.

 

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