Regional Head of Research, Africa Global Research, Standard Chartered, Mrs. Razia Khan, said this in a report titled: “Nigeria – Into the 21st Century,” made available to THISDAY at the weekend.
The apex bank said that effective from June 1, 2012, daily cumulative withdrawals and lodgments in banks by individuals will be limited to a maximum of N150,000. It has also limited the daily cumulative withdrawals and lodgments by corporate customers at N1, 000,000 effective from the same date. But the proposed policy has continued to generate mixed reactions from the banking public.
But Khan argued that there were potential advantages to the policy. The financial market analysts urged stakeholders in the Nigerian banking industry to consider evidence from other countries.
In Kenya, over $7 billion or 20 per cent of Gross Domestic Product (GDP), was transferred via the mobile-phone payment platform in 2010.
“If the changes succeed in attracting more money to the banking sector, Nigeria’s monetary policy transmission mechanism is likely to improve. Banks, even those without large branch networks, are likely to gain, boosting competition in the sector, but benefiting those institutions that are able to invest in improved technology. For now, persistent doubts suggest that delays to the timetable and adjustments to the cash limits on withdrawals are possible. Even so, if Nigeria keeps to the path of reform, the benefits should be considerable.
“Facilitating new means of payment has reduced the costs associated with financial transactions and allowed for productivity gains. Information spreads more rapidly. Commercial transactions are facilitated. Financial exclusion falls dramatically. The overall effect is positive, boosting growth. Limits on cash transactions in Nigeria should at least encourage the development of other means of payment, even if there are doubts over whether the Kenyan model can be fully replicated in West Africa,” she explained.