Cashless Lagos underway

BUSINESS

The Central Bank of Nigeria’s Cashless Lagos pilot project has begun in the capital, aimed at reducing the amount of physical cash in circulation and increasing electronic commerce.

The Bank’s pilot project, which kicked off on 1 January, will impose a cash handling charge on cash withdrawals or deposits exceeding N150,000 for individuals and N1,000,000 for corporates.

The Bank says the new cash policy aims to drive development and modernisation of the country’s payment systems in line with Nigeria’s Vision 2020.

It is also intended to reduce the cost of banking services and drive financial inclusion by providing more efficient transaction options and greater reach.

The Bank says the outcome of the pilot project will determine how the system is implemented in the rest of the country by mid-year.

The Bank's deputy governor, Tunde Lemo said five key areas have been identified for cost saving in banks. They include cash management; payments system transformation; shared IT infrastructure; and services, IT standards and industrialization and shared back office operations.

The payment systems transformation represents about 60% of the industry's operating cost, he said.