Monday, 31 March 2014

CBN’s cashless policy extends to all states July 1

WorldStage Newsonline-- The cash less policy of the Central Bank of Nigeria is to be extended to all states in the country by July 1, 2014.

The Branch Controller of the Central Bank of Nigeria (CBN) Kaduna Branch Alhaji Mohammed Gusau said at the 2014 Annual Dinner of the Kaduna Bankers’ Committee, Gusau that the decision to extend it to the remaining states was because of the success recorded so far by the policy, adding that the cashless policy is expected to reduce the cost of banking services, drive financial inclusion, reduce risk associated with handling cash and enable more transparency in payments.

According to him, the bank is planning to organise a sensitization for all stakeholders in Kaduna on Thursday, April 3 in preparation for the commencement of the policy in the state.
He disclosed that the with effect from July 1, 2013, the clearing activities of the apex bank witnessed a transformation from the usual exchange of instruments at the Central Bank of Nigeria Clearing Houses to a more robust and automated system of Clearing by the introduction of Cheque Truncation System.

According to him, “the Cheque Truncation System is a system whereby physical clearing instruments are truncated into electronic format and transmitted to the Central Clearing Centre.

 Presently, cheques presented in the automated clearing house in day T 1 earns value for the beneficiary on next day which is T 2, whereas the beneficiary bank is settled in day T 1.

“However, the CBN believes that the delivery of value to beneficiaries at the close of business on day T 1 is achievable.  Such a move would further enhance the National Payment System and contribute to the attainment of the goals of the Payment System Vision 2020.

“The Clearing House activities conducted through CBN Kaduna Clearing House from January to June, 2013, indicated a total of 83,196 financial instruments valued at N84,872,033,002.66. These figures indicate only the first six months of operations in 2013, before the commencement of Cheque Truncation System” he stated.

He also disclosed the CBN had guaranteed about 830 loans under the Agricultural Credit Guarantee Scheme (ACGS) at a total valued  N116, 740,400 while about 724 loans valued at N133, 977,112.24 had been fully repaid during the period under review.

According to him, “the Central Bank of Nigeria launched the Micro, Small and Medium Enterprises Development Fund (MSMEDF) on August 15, 2013 with a take-off seed capital of N220billion.

“The Fund has the broad objective of channeling long-term, low-interest funds to the Micro, Small and Medium Enterprises (MSMEs) sector of the Nigerian economy through Participating Financial Institutions (PFIs). The specific objective is to reach over 2.0 million MSMEs over a 10-year period. In addition, 60 per cent of the Fund is targeted at women entrepreneurs.”

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