Despite a decline in overall money supply (M2), currency outside banks (COBs) in Nigeria witnessed a notable increase of 10.67 percent in the first quarter of 2024, reaching N3.63 trillion by March, according to data from the Central Bank of Nigeria (CBN).
The CBN’s figures indicate a significant rise from the N3.28 trillion recorded in January 2024. On a monthly basis, COBs saw a 6.45 percent increase from N3.41 trillion in February 2024.
However, the broader measure of money supply (M2) experienced a 1.75 percent decline, dropping to N92.33 trillion in March 2024 from N93.97 trillion in February of the same year. On a quarterly basis, M2 decreased by 0.55 percent compared to January 2024’s level of N92.84 trillion.
Meanwhile, currency in circulation rose by 6.03 percent to N3.87 trillion in March 2024 from N3.65 trillion in January. Compared to February 2024, it saw a 4.88 percent increase from N3.69 trillion.
In a related development, Nigerian commercial banks have resumed charging fees on cash deposits exceeding specified thresholds for individuals and corporates, following the expiration of the suspension deadline on April 30, 2024.
The CBN, in December 2023, had suspended the processing fee of 2 percent for cash deposits exceeding N500,000 for individuals and a 3 percent fee for cash exceeding N3 million for corporates. However, the reintroduction of charges came into effect from May 1, 2024.
Sterling Bank, in an email notification to customers, confirmed the resumption of charges, stating, “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 percent and 3 percent will be incurred respectively.”
This move marks a reversal of the previous directive that all financial institutions accept cash deposits from the public without charges, aiming to promote electronic transactions, alleviate burdens on cash transactions, and foster financial inclusion.
The initial imposition of processing charges on cash deposits above specified thresholds dates back to December 20, 2019, as outlined in the Guide to Charges by Banks, Other Financial Institutions, and Non-Bank Financial Institutions.
