Business groan as cash crunch hits Banks
…banks impose limits on withdrawals, with amounts as low as N10,000
…CBN Keeps mute on reasons for cash shortage
Banks are currently grappling with a severe shortage of physical cash, causing disruptions in financial transactions and frustrating customers.
This is despite assurances from the Central Bank of Nigeria (CBN) regarding cash liquidity; many financial institutions are struggling to meet demands for cash withdrawals.
Customers, especially small businesses heavily reliant on cash transactions, face difficulties accessing funds for daily operations. Some banks have imposed limits on withdrawals, with amounts as low as N10,000, exacerbating customers’ challenges.
The CBN recently directed banks to continue issuing and accepting old and redesigned naira banknotes. However, findings indicate that several financial institutions cannot fulfil these demands, leading to the rationing of available cash.
The Central Bank Authorities have yet to provide a comprehensive explanation for the cash shortage, but some bank officials blame the CBN for the shortage.
Susan Ezengwu, a senior official at UBA bank, pointed blame at the CBN, stating, “The CBN has not been supplying us with cash; instead, they have been giving us old and mutilated naira notes.” Other banks, such as Sun Trust Bank in Wuse 11, reported a scarcity of denominations, with only N200 notes available.
Patrick Olawale from GTB alleged that only old and dirty notes are being supplied, hinting at possible government hoarding, especially of the redesigned notes.
Lamenting his frustration, John Salisu, a customer at the Access Bank branch, said he could not withdraw the total cash he needed.
“I needed N200,000, but the bank said they can only give me N50,000 because they don’t have enough cash. I needed the money to replenish my furnished goods from the local market. Now I will have to make do with transfers, but the challenge is that local market owners don’t use bank accounts”, he cried.
More so, some ATMs are running dry. Timothy Hannah said she visited her branch to withdraw N100,000 but was blatantly told there is no cash. She was directed to use the ATM, but it stopped dispensing after she withdrew N10,000.
“After I withdrew N10,000, it stopped paying me. I have tried other ATMs around the Garki area, but they were not dispensing “, she said.
Furthermore, some PoS operators are lamenting difficulties in getting cash to sustain their business, and a few have increased their charges.
A POS operator situated at Galadimawa, visited by the reporter who identified herself as Ifeoma, said she had to go to at least three of her banks to be able to raise substantial cash for her business.
She demanded N250 per N10,000 withdraw instead of N200
“I went to more than three banks to withdraw cash before I could get N250,000. I know the stress I paused, so I will be forced to increase my charges.
The persistence of the cash scarcity contrasts with the CBN’s reassurances, citing the legal tender status of old and new notes beyond the initial December 31, 2023 deadline.
The apex bank had also assured ample banknotes, dismissing concerns of a cash shortage, especially during the festive period.
