Money outside the banking system, also known as currency outside banks (COBs) rose by 10.67 percent in the first quarter of 2024, despite a decline in money supply (M2).
Data from the Central Bank of Nigeria (CBN) showed that COBs increased to N3.63 trillion in March 2024 compared to N3.28 trillion recorded in January 2024.
On a month-on-month basis, currency outside banks rose by 6 45 percent from N3.41 trillion in February 2024.
Money supply (M2) decline by 1.75 percent to N92.33 trillion in March 2024 from N93.97 trillion in February of the same year.
On a quarterly basis, M2 dropped by 0.55 percent compared to the level of N92.84 trillion in January 2024.
The CBN data also revealed that currency in circulation increased by 6.03 percent to N3.87 trillion in March 2024 from N3.65 trillion in January of the same year. Against the level in February 2024, it rose by 4.88 percent from N3.69 trillion.
The Nigerian commercial banks have resumed charges on cash deposits exceeding threshold for individuals and corporates after the suspension deadline expired on April 30, 2024.
The CBN in December 2023, suspended the processing fee of 2 percent for cash exceeding N500,000 for individuals and 3 percent fee for cash exceeding N3 million for corporates.
The reintroduction of charges was seen in an email sent out by Sterling Bank to it’s customers informing them about the resumption of the charges.
“This is to inform you that effective Wednesday, May 1, 2024, processing fees have been reintroduced on cash deposits exceeding the thresholds. “This means when you deposit cash above N500,000 (for individuals) and N3,000,000 (for corporates) at any Sterling Branch, the applicable processing fee of 2 per cent and 3 per cent will be incurred respectively,” Sterling Bank said.
A circular signed by Adetona Adedeji, acting director of Banking Supervision, on December 2023, stated, “consequently, all financial institutions regulated by the CBN should accept all cash deposits from the public without any charges going forward,”
CBN suspended cash processing fees to encourage electronic transactions, reduce the burden on individuals and businesses dealing with cash transactions, and promote financial inclusion.
On December 20, 2019, the CBN imposed processing charges on cash deposits above N500,000 for individuals and N3,000,000 for Corporates as contained in the Guide to Charges by Banks, Other Financial Institutions and Non-Bank Financial Institutions.
