Cashless Policy: NFIU cautions public, private entities as government stops ‘direct cash withdrawals’ from March 1

*Malam Modibbo HammanTukur, Director and CEO of Nigeria Financial Intelligence Unit, cautions the public and corporate entities against ‘massive cash withdrawals’, noting offenders face imprisonment, payment of equivalent value of money involved in violating the country’s cashless policy

Gbenga Kayode | ConsumerConnect

The Nigeria Financial Intelligence Unit (NFIU) has warned the public and private entities against ‘massive cash withdrawals’ in view of the extant cashless policy of the Central Bank of Nigeria (CBN).

ConsumerConnect reports Malam Modibbo HammanTukur, Director and Chief Executive Officer (CEO) of the regulatory agency, gave the advisory in a statement issued Thursday, January 5, 2023, in Abuja, FCT.

HammanTukur stated this against the backdrop of the level of security threats and financial liquidity in the West African country.

The NFIU Chief Executive also urged all Federal Ministries, Departments, Agencies (MDAs), State Governments, Local Government Councils, corporate bodies as well as, civil servants, public and private officers to embrace the cashless policy of money transactions to deepen national security.

He further explained this move is to strengthen the country’s security and financial systems.

HammanTukur said the  Federal, State Governments, and the 774 Local Government Councils (LGCs) had made cash withdrawals of about N200 billion, N156 billion and N120 billion, respectively, from 2015 to date.

However,the stated that in order to curb these in the economy, the Federal Government has directed and ordered the stoppage of “direct cash withdrawals by public institutions and officers” with effect from March 1, 2023.

Nigerians need to adopt new technologies for financial services

The NFIU as well advised all stakeholders in the Nigerian economy to adopt new technologies of financial transactions and abide by the withdrawal limits or thresholds earlier prescribed by the CBN for corporate and individual transactions.

Recall the Bankers’ Bank, December 2022, had prescribed a threshold of N5 million only for corporate accounts and N500,000 only for individuals per week.

Cash withdrawals still higher than deposits but….

HammanTukur, however, explained that no infractions have been recorded so far since the activation of the Naira redesign policy, but noted that cash withdrawals are still higher than deposits.

He stated: “Liquidity is needed to finance our markets”, and there is no threat to the corruption and money laundering crusade yet, he said.

Cashless policy guideline ‘irreversible’: HammanTukur

Aside from the above, the NFIU CEO also assured that any consumer with a genuine need for huge cash transactions would seek presidential approval, as there is no “standing waiver” on this policy.

While warning that the “guideline is not reversible”, HammanTukur explained that any cash withdrawal beyond the approved limit would trigger a red flag by the relevant anti-graft agencies in the country.

More so, Nigeria has been designated as a non-cash society by the World Bank, IMF and ECOWAS, among other stakeholders, with effect from March 1 this year, he declared.

According to him, this is besides the categorisation of Nigeria as a “high risk” country by the concerned parties because of the enormous security challenges facing the country.

He said: “We can’t flow with politicians” because of obvious complications, while the set March 1 deadline is sacrosanct. Nonetheless, HammanTukur is optimistic, that the cash transactions would drop from the current N3 trillion to about N1trillion when the policy became effective.

The Director reminded Nigerian consumers of the extant three years’ imprisonment, payment of equivalent value of money involved, or both punishments awaiting violators of the cashless policy in Nigeria.

HammanTukur underscored the teeth of the “Enforcement, guidelines and policies for mitigation of money laundering, terrorist financing, proliferation of weapons and prevention of predicate crimes” Act of 2022, especially in line with Sections 2 and 22 of the NFIU Laws.

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