Money outside the banking system, also known as currency outside banks (COBs), increased by 10.67 percent in the first quarter of 2024, despite a drop in the money supply (M2).
COBs climbed to N3.63 trillion in March 2024 from N3.28 trillion in January 2024, according to data from the Central Bank of Nigeria (CBN).
Currency outside of banks increased by 6.45% month over month from N3.41 trillion in February 2024.
The money supply (M2) decreased from N93.97 trillion in February 2024 to N92.33 trillion in March 2024, a 1.75 percent decrease.
On a quarterly basis, M2 decreased by 0.55 percent from the level of N92.84 trillion in January 2024.
Additionally, according to CBN data, the amount of money in circulation rose from N3.65 trillion in January 2024 to N3.87 trillion in March 2024, a 6.03 percent increase. It increased from N3.69 trillion to a level of 4.88 percent in February 2024.
After the deadline for suspension expired on April 30, 2024, Nigerian commercial banks started charging for cash deposits made by individuals and corporations that exceeded the threshold.
In December 2023, the CBN stopped the two percent processing fee for individuals with cash above N500,000 and the three percent processing fee for corporates with cash exceeding N3 million.
An email that Sterling Bank sent to its clients alerting them to the charges’ restart revealed the levies had been reinstated.Â
“This is to notify you that processing costs have been reinstated on Wednesday, May 1, 2024, for cash deposits that exceed the thresholds. This implies that a processing fee of two percent or three percent will be charged at any Sterling Branch for cash deposits above N500,000 for individuals and N3,000,000 for corporations,” according to Sterling Bank.
In December 2023, an acting director of Banking Supervision, Adetona Adedeji, signed a circular that said, “henceforth, all financial institutions regulated by the CBN should accept all cash deposits from the public without any charges.”
In an effort to promote financial inclusion, ease the stress of cash transactions on individuals and businesses, and boost electronic transactions, CBN halted cash processing fees.
In accordance with the Guide to Charges by Banks, Other Financial Institutions, and Non-Bank Financial Institutions, the CBN implemented processing fees on cash deposits over N500,000 for individuals and N3,000,000 for corporations on December 20, 2019.
