The Automated Teller Machines of Deposit Money Banks have consistently remained empty in recent months as banks grapple with a sustained low cash supply.
It was also gathered on Wednesday that some DMBs, particularly in the Federal Capital Territory, have begun another round of cash rationing, restricting maximum over-the-counter withdrawals to a daily limit between N5,000 and N20,000.
While banks struggle to get cash, Point-of-Sales operators have been fulfilling the cash needs of customers.
Speaking at the Facts Behind the Rights Issue Presentation of FBN Holdings at the Nigerian Exchange Limited recently, the Executive Director/Chief Financial Officer of First Bank, Patrick Iyamabo, said that the matter was an industry-wide one and not peculiar to a specific bank.
He said, “It is an industry problem. Most customers after exhausting the options available in other banks, tend to settle at FirstBank to address their cash needs.
“The challenge differs by location but we know it is a challenge that the regulator is looking into to address. But as we speak of physical cash, we must appreciate that the direction of the industry is to go digital.
“A lot of our customers do most of their transactions digitally, and you heard the GMD speak to this, very often people don’t want to transact in cash. In terms of this new order, your bank, FirstBank is very well positioned so if you look at the statistics and I’m speaking to independent statistics, just pick up your NIBSS report, the bank with the most stable platform meaning availability to always transact digitally is FirstBank.
“So, all our customers have the benefits of having their cash in First Bank and having access to this cash anytime anywhere and as necessary. It’s a huge advantage.”
Speaking anonymously with The PUNCH, a banker at a tier-1 bank put the blame on the Central Bank of Nigeria.
“It is what CBN has given us that we are using. We are confined within the limits of what is available to us. Also, because we are a big operation, we have to deal with many other businesses.
“Have you also noticed that there is a boom in the PoS business? Those people don’t take their money to the banks. The money comes out of the banks and it stays within their circle.
“They warehouse their funds, unlike you and I who would withdraw money and spend it which will eventually find itself back into the formal banking system. It is not the same with them. They warehouse their funds and distribute it among themselves.”
According to data from the CBN, currency outside the banks hit N4.02tn in September from N3.86tn in August. This brings it closer to the value of currency in circulation which stood at N4.31tn in September.
Meanwhile, some PoS operators on Lagos Island have increased their charges from N200 for cash of N10,000 to N300.
This was observed at both the CMS bus stop and at Obalende. However, off Lagos Island, the rates had remained at N200 for cash withdrawal of N10,000.
It was further gathered that banks have begun cash rationing, restricting maximum over-the-counter withdrawals to a daily limit between N5,000 and N20,000.
Findings by The PUNCH showed that the development is gradually leading to cash shortage, as many ATMs were non-functional, leaving customers with no choice but to seek alternative means of withdrawing cash.
As a result, many people have turned to Point-of-Sale operators, who have become the primary channel for cash withdrawals, albeit often at higher transaction fees.
Major commercial banks visited by one of our correspondents on Wednesday claimed not to have sufficient cash allocation hence the ration withdrawals to serve more customers.
The banks visited include Guaranty Trust Bank, Zenith Bank along Airport Road, and EcoBank at Jabi in Abuja.
A bank customer at EcoBank, who spoke without mentioning her name, said she was only allowed to withdraw N5,000 from N20,000 previously allowed.
Punch
