Banks Move To Limit Over-the-counter Withdrawals To N10,000

Customers of Deposit Money Banks, DMBs, may be faced with a new across-the counter cash withdrawal limit to be pegged at N10, 000. It was learned,weekend, that the DMBs, under the aegis of the Bankers Committee, have already approached the Central Bank of Nigeria, CBN, to propose the limit.

Sources said the measure being contemplated would drastically reduce the number of customers that would need to physically visit banking halls for transactions.

The DMBs, sources said, wanted to achieve two objectives via this strategy, if approved by the CBN. The objectives include greater use of electronic banking and smaller workforce – as a means of cutting cost of operations. Already, some banks had laid off many workers, citing operational losses, especially as the Federal Government Treasury Single Account Policy, TSA, has deprived them of federal government deposits.

It took the intervention of the Federal Government, which even had to threaten banks with severe sanctions, including the withdrawal of their licences, to pull back on the gale of mass sack. A ‘State of the Economy’ document of the apex bank presented to the Bankers’ Committee in Abuja, last Thursday, showed that unaudited Profit Before Tax of banks for the period ended April 2016 indicated a decrease from N222 billion in April last year to N198 billion, representing a 10.8 per cent or N24 billion decrease.

“The decline was driven largely by a decrease in both interest and non-interests income which decline by 6 per cent or N50 billion and 54 per cent of N259 billion, respectively,” the document read.

It explained that the banking sector was still faced with a lot of pressure points, some of which it listed as resurgence of inflationary pressures in the face of negative output growth, continuing low oil prices, and lack of fiscal buffers.

In addition, the apex bank said capital flow reversals, rising pressure on exchange rate in the face of declining external reserves, huge growth in credit to the government to compensate for declining oil receipts were other major challenges confronting the industry.

Source:- financialwatchngr