Following the Naira Scarcity in Nigeria, GoldenNewsNg has compiled Latest CBN News and Update on Naira Notes Today 25th April 2023.
1. Mobile Banking Surges in Nigeria Amid Naira Scarcity
The scarcity of the naira in Nigeria has caused a significant rise in the use of mobile devices for financial transactions, with data from the Nigeria Interbank Settlement System indicating a surge of 505.29% in mobile transactions during the first quarter of 2023. The volume of mobile transactions rose to 671.93 million from 111.01 million in the corresponding period last year, while the value of mobile transactions grew to N9.07tn from N3.49tn in 2022.
Central Bank Policy Spurs Growth
The Central Bank of Nigeria’s redesign and withdrawal limit policy has been cited as the main driver of the surge in mobile banking usage. This policy caused naira scarcity, forcing many individuals and organisations to rely on online banking services. The policy stated that the maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations shall be N500,000 and N5m, respectively, and customers should use alternative channels such as internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc., to conduct their banking transactions.
Mobile Banking Usage Grows Globally
The surge in the use of mobile banking in Nigeria is part of a wider trend of increasing digital transactions. According to GSMA, global mobile money transactions grew by 22% from $1tn in 2021 to around $1.26tn in 2022. In Nigeria, mobile accounts grew from 16% in 2021 to 22% in 2022. The COVID-19 pandemic has been cited as a factor in this trend, as it has led to a reduction in the use of cash, with more people turning to mobile banking.
Challenges in Mobile Banking
While the growth of mobile banking presents opportunities for financial inclusion, it also comes with challenges. Bank mobile apps failing to open and USSD options not working have become commonplace, while mobile devices are increasingly targeted during muggings, enabling perpetrators to access victims’ accounts. Nonetheless, GSMA sees mobile banking as a driving force behind financial inclusion around the world, offering an incredible opportunity to reach the 1.4 billion people who still do not have access to financial services.
2. Scarcity of new Naira notes hits Abuja
As the December deadline approaches for the discontinuation of old naira notes, residents of Abuja and its environs are expressing concern over the scarcity of the new notes. Despite the Central Bank of Nigeria (CBN) allowing the old 200, 500, and 1000 naira notes to remain as legal tender until the end of the year, some residents are worried that the scarcity of the new notes could lead to a repeat of the cash crunch experienced earlier this year.
Scarcity of New Notes
A correspondent of the News Agency of Nigeria (NAN) who monitored the availability of the new notes reports that residents are lamenting over the scarcity of the new notes. Moses Nnegedu, a resident of Nyanya, suggested that the CBN should monitor commercial banks to ensure the circulation of the new naira notes before the deadline.
Hoarding of New Notes
According to Gabriel Daniel, a resident of Garki, even the banks are dispensing old notes both at the ATMs and in the banking hall, making it difficult for customers to obtain new notes. Nigerians believe that those who have a lot of money and were able to get the new notes earlier are hoarding them against the December deadline. Abbah Moses, a resident of Gwagwalada, confirmed that the scarcity might be due to the hoarding of the new notes.
Need for More New Notes
Mr. Manasseh Gimba, a resident in Dutse, suggested that the CBN should print more new notes and ensure they are in circulation. He also proposed that the old notes in circulation should be limited if the December deadline is to be met. Meanwhile, the Supreme Court had earlier extended the validity of the old naira notes until December 31, 2023.
As Nigerians continue to express their concerns over the scarcity of the new notes, it remains to be seen if the CBN will take steps to increase their circulation before the December deadline. Failure to do so could have serious implications for the country’s economy and the daily lives of its citizens.
3. Katsina State: As Naira Scarcity Ends, Banditry, Kidnapping Return
The re-emergence of banditry and kidnapping for ransom in Katsina State has been a concern since the cashless policy by the Central Bank of Nigeria was extended and the old Naira notes recirculated. However, the Katsina State Police Command has made announcements of repelling attacks carried out by suspected bandits in the state, resulting in the death of three suspected bandits in different operations. The northwest coordinator of the Coalition of Northern Group affirmed that the cashless policy has reduced insecurity in the state and Nigeria in general. Governor Aminu Bello Masari confirmed the reduction of banditry and urged the incoming administration to sustain the template to finally end the atrocities.
Massive Rush to Banks As CBN Makes News Announcement About Unlinked Accounts.
In recent news from Nigeria, the Central Bank of Nigeria (CBN) has announced plans to close bank accounts not linked to Bank Verification Numbers (BVN) across deposit money banks. This has led to an uptick in new registrations, with banks reporting a massive rush by customers. The move is aimed at cleaning up the sector and reducing financial fraud. The CBN has been working with the Nigeria Inter-Bank Settlement System (NIBSS) to address the increasing fraud incidences in the financial sector.
The BVN is a unique identifier that links a person to bank accounts across financial institutions in Nigeria and is issued or required at the point of bank account opening. BVN gives account owners a verifiable identity across the Nigerian banking system and protects their accounts from unauthorized access. The recent policy pronouncements by the apex bank have sparked an increase in new registrations, as customers rush to comply with the new guidelines.
In addition to the new BVN regulations, the CBN has also issued new guidelines to commercial banks on dormant accounts. The guidelines state that accounts that have received no deposit or withdrawal for upwards of one year will be considered dormant. The CBN will open a pool account to hold all funds left in such dormant accounts. This move is aimed at encouraging customers to update their bank records and ensure that their accounts remain active.
The CBN’s Director of the Risk Management Department and Chief Risk Officer, Blaise Ijabor, has stated that the bank’s aim is to clean up the sector and reduce the incidence of financial fraud. The move is expected to drive new BVN registrations by people whose accounts are not linked to BVN and encourage them to update their bank records. The CBN’s efforts are commendable and are likely to improve the integrity of the financial sector in Nigeria.
The number of Bank Verification Numbers has hit 57 million, new data shows
According to newly released data from the Nigeria Inter-Bank Settlement System (NIBSS), the number of individuals with Bank Verification Numbers (BVN) in Nigeria has reached 57 million as of April 9, 2023.
However, despite the Central Bank of Nigeria’s (CBN) announcement that it would shut down bank accounts not linked with BVN, registration for new BVN has slowed down since the beginning of 2023. In the last three months of 2023, banks in Nigeria only recorded 500,000 new BVN enrolments, which is significantly lower than the average of 400,000 monthly registrations in 2022.
As of December 2022, the BVN record stood at 56.5 million. NIBSS has stated that as of December 2021, active bank accounts in Nigeria were 133.5 million, with data for 2022 yet to be released.
The BVN is a unique identifier that links a person to bank accounts across financial institutions in Nigeria and is issued or required at the point of bank account opening. It gives account owners a verifiable identity across the Nigerian banking system and protects their accounts from unauthorized access.
