Citizens’ angst as banks begin cash rationing

Nigerians are now worried that deposit money banks (DMB) have resorted to rationing cash, which could cause cash scarcity like the one experienced early last year; PAUL OKAH reports.

The first quarter of 2023 was not funny to Nigerians as they experienced hardships caused by cash scarcity as a result of the new bank notes introduced by then Godwin Emefiele-led Central Bank of Nigeria (CBN).

It appears Nigerians will be heading to a near-repeat of the 2023 experiences as Deposit Money Banks (DMBs) have resorted to rationing cash to customers in different parts of the country.

Investigations by this reporter revealed that Automated Teller Machines (ATMs) are no longer stocked to dispense cash to customers in several banks across the Federal Capital Territory (FCT) and other parts of the country.

Also, customers transacting over the counter hardly get up to N500, 000 in cash as requests of such nature are often met halfway by tellers explaining they don’t have much cash and have to give half of the requested amount.

Ironically, point of sale (PoS) operators charge extra amount of money to supply cash to customers, leading to insinuations that DMBs deliberately ration cash in order for customers to patronise PoS operators, who allegedly work for bank officials.

Empty ATMs

Checks by this reporter showed that many banks no longer load their ATMs with cash or load them once a day and deliberately refuse to reload once the loaded ones are exhausted by customers.

When our reporter visited Zenith bank in Dusten-Alhaji on Wednesday, none of the ATMs was dispensing cash, while frustrated customers had no option than to patronise PoS operators beside the bank or at Dutsen market, which is directly opposite the bank.

Similarly, when our reporter visited ATMs at GTB, Access, First Bank, Unity, UBA and FCMB banks in Gwarinpa, none was dispensing cash as messages such as “unable to dispense cash,” “temporarily out of service,” or “service unavailable” flashed on the screens of the ATMs.

The same experience was recorded at Wema, First Bank, UBA and Zenith banks at Bannex, while all the ATMs at the Federal Secretariat were equally unavailable to dispense cash, except to make transfers or check account balance.

Nigerians’ angst

Speaking with Blueprint Weekend, a businessman, Ibrahim Abubabar, said he has not been able to withdraw from the ATM for weeks and expressed worry things may get out of hand.

He said, “I don’t know what is happening, but it seems we may experience another cash scarcity. Since last month, there is no time I will visit the ATM and get cash. It is always the same language of being unable to dispense cash and I will have to patronize the PoS operators because there are many transactions you cannot even do via bank transfer. Many of the local people I often purchase things from always prefer cash, while some are reluctant to accept transfer.

“During the Sallah, I had to pay a huge amount of money to withdraw from the PoS as I couldn’t withdraw from the ATM. I sincerely hope we are not heading for another cashless policy or cash scarcity like last year because it won’t be a funny experience. Whatever that is the case, I urge the CBN to intervene because it is no longer funny.

“The common allegation is that banks connive with PoS operators to create artificial scarcity so that the PoS operators will be dispensing cash and raking in thousands in charges, while making returns to banks as some staff have PoS stands. So, if that is the situation, I will urge the CBN to investigate the matter critically and punish erring bank branches because Nigerians are already going through a lot in this economy.”

Also speaking with our reporter, a civil servant, Mrs. Regina Olakunle, said her bank reduced the amount she could withdraw per day to just N50, 000.

“It is difficult to get cash from the banks now, especially the ATM. I don’t really know what is happening because, before I could withdraw N100, 000 to N200, 000 over the counter from my bank, but I can only withdraw N50, 000 now. The situation is so terrible that some banks will tell you it is only N10, 000 or N20, 000 they can pay over the counter,” she said.

PoS agent speaks

A PoS operator in Dutse-Bmuko, Mr. Israel Edidiong, when asked to comment, said he capitalises on cash from depositors and traders to run his business as banks have not been giving him the needed amount.

“Cash scarcity is nothing new to us. We experienced it last year, but survived. Though we have been noticing a reduction in the amount dispensed by banks, we have alternative ways of getting money. If it is not from traders unable to go to the bank, then it would be through the multiple bank accounts we operate.

“For instance, I went to Zenith Bank on Friday to withdraw 500, 000 cash to keep at hand ahead of the Sallah celebration, However, I was only able to get N200, 000. I had to go to Gwarinpa and got N100, 000 and 200,000 from my two alterative banks. That was what helped me because people usually need money during celebrations.

“Again, there is no cash scarcity that will be like what we experienced last year under Emefiele. In fact, I will call this one cash rationing, not scarcity because the cash is available, but not in quantity. My only explanation is that the banks want people to embrace digitalization and for people to be making use of electronic means for transactions and not carry much cash around, otherwise I don’t see the reason the cash in circulation should be reduced,” he said.

Explanations

Speaking with our reporter, a staff of TAJ Bank in Wuse, Abuja, who pleaded anonymity, admitted that banks ration cash according to location and amount received from the CBN.

She said, “Yes, we are rationing cash. It is not something that started today. This is how we do it: We get certain of amount from CBN for issuance to customers. So, depending on the amount we get, we ration to customers so that it can go round.

“For instance, if a customer needs N500, 000, we can only give N200, 000 so that we can have some to give to other customers. The money has to go round so that no customer will say he or she came to the bank and was not giving cash.

“The rationing is not even much or too obvious, just that we like blowing things out of proportion in Nigeria. A customer can always get cash, just that it won’t be up to the large quantity of cash or amount he or she wanted. Moreover, many now prefer to give money to PoS operators, so we don’t receive much deposit like before.”

A banker worker with First Bank in Imo state, who pleaded not to be named, said the main reason for the cash scarcity is because of people hoarding the new bank notes. According to him, his bank rations cash according to availability and has no reason to withhold cash.

He said, “One of the reasons for cash scarcity, apart from the CBN’s cashless policy, is that people started hoarding the new naira notes, as against the old naira notes. People don’t spend the new naira notes. They prefer keeping it at home. The new notes are not much, so that led to cash scarcity. We have been experiencing the cash scarcity since February, so it just not about the Sallah.

“For instance, since February, my branch has not paid more than N50, 000 to an individual, PoS agent inclusive. Another reason banks don’t have money to pay is because PoS operators now meet fuel station owners, flour dealers and, supermarkets and other big establishments, for money. These are the major businesses that deposit money in the bank. They now prefer giving money to Pos operators, who give them some percentage.

“Banks have no reason to withhold cash from customers. The truth is that we always have cash supply problem from both the CBN and the general public. These days, we practically dispense all the cash we receive from both the CBN and the depositors every day, but we ration it according to availability. We don’t connive with PoS operators as many people claim. PoS operators have alternative sources, as I earlier mentioned.”

CBN releases statistics

Last week, the CBN reported that Currency Outside Banks (CoB) fell month-on-month (MoM) by N27.5 billion (or 0.55 per cent) to N3.6 trillion in April, from N3.62 trillion in March 2024.

The CBN Money and Credit data for April showed that this was the first decline in CoB this year as it has been on the rise after the January 2024 decline by 4.37 per cent to N3.28 trillion from N3.43 trillion in December 2023.

According to analysts, the 0.55 per cent decline in currency outside banks may be a reflection of a decline in cash availability in the system.