By Nwafor Okafor
A Federal High Court sitting in Awka, Anambra State and presided over by Justice N.O Dimgba has ruled as discriminatory the cashless policy of the Central Bank of Nigeria on six states of the federation and the Federal Capital Territory.
The state’s are Anambra, Abia, Lagos, Ogun, Kano and Rivers
This followed a suit instituted by Anambra State based legal practitioner, Chijioke Ifediora, against the Apex court describing the policy as discriminatory and offending section 42 of the 1999 constitution.
Ifediora told the court”On the 7th of January 2020, I visited a Branch of the Bank in Amawbia Awka, to make payments into my Bank account with the sum N600,000 but I was told by a staff of the bank that I would be charged three percent of the cash amount I had.
“I inquired as to why such sum would be levied on the cash amount I had, I was shown a Central Bank Circular which was pasted across the cash machine PSM/DIR/CON/CWO/02/014 published on 17th of September 2019 mandating the bank to charge three percen for lodgment above N500,000.
“I was prevented from making the lodgments except I paid three percent of the cash amount which was above N500,000.
“There is no constitutional foundations/pillar for such discriminatory policy neither is any statutory enabler for such biased circular.
“I have approached the Court as a legal practitioner obligated to observe the rule of law and foster the course of justice, as well as invoke the jurisdiction of the court on the policies and actions of public institutions established to serve the public impartially.
The counsel for the CBN,Jackson Iragunima in his submission contended that the policy was not discriminatory and is for the wellbeing of the country.
The CBN maintained that that the plaintiff did not have the authority of all the citizens and corporate institutions residing in Anambra, Abia, Lagos, Ogun, Kano, Rivers and FCT to institute the action on their behalf.
The apex bank further contended that the plaintiff/respondent was a meddlesome interloper and busy body who did not have any legal interest to protect in the suit .
In his judgement, Justice Dimgba said, “I believe the claims in these depositions are sufficient to donate the plaintiff not only with a locus standi, but also a reasonableness on the case which he has brought before the court.
He agreed with the plaintiff that the CBN policy was discriminatory and offended section 42 of the 1999 constitution (as amended).
He said,”Assuming that the cashless policy is beneficial to the nation for its financial stability and growth, and inevitably demands the imposition of financial levies on banking customers as an incident of its operationalisation, why will residents in some named states suffer this disability while those in other states do not?
“In the absence of any explanations in a policy document of the defendant(CBN), or in the implementing circulars being litigated before the Court in this suit, I cannot see my way through these questions raised.
“This nation, as all civilized nations of the modern era, is governed by the rule of law. The rule of law demands that government institutions, such as the defendant in this suit, should provide rational justifications for policy choices they have made and not to act arbitrarily.
“As said above, I have
reviewed the policy document as contained in the website of
the defendant(CBN) as well as the implementing circulars and I am unable to see any rational and objective
justification for the selective imposition of financial penalties against residents of the named six states and the FCT for
making cash withdrawals and lodgements/deposits over the
” One may want to ask: what is so
inherently unlawful in a resident of a state like Kano or Lagos
or Anambra States making a cash deposit or withdrawal over N500,000 in a bank, that such a resident needs to be
penalized with a surcharge of 2% and 3% of the said deposit/withdrawal, but is not so unlawful and worthy of penalization when a resident of a state like Kaduna or Edo or Enugu not named in the circulars make such a deposit and or withdrawal, when it is the same legal tender that is used in the entire federation?
The judge added,”The aim of the policy as explained in the defendant’s website is to promote virtual and electronic payment systems and to reduce or eliminate the proliferation of physical cash within the economy. If this is so, why then is the circular of 17/09/19 targeting and penalising cash lodgements and deposits, and not limited to cash withdrawals as was the initial policy of 20/04/17? The imposition of financial levies on cash lodgements in my view appears counter-intuitive and opposed diametrically to the idea of cashlessness which the defendant is said to be promoting.
This aspect of the policy rather than promote cashlessness in the economy, in fact encourages the proliferation of cash, particularly for traders and other day to day business people who would rather keep the cash they have realised from their daily business operations with them than lodging same into their bank accounts and be required to pay financial levies of 2% and 3% of the amount by which they have exceeded the daily threshold, depending on if they were individual or corporate persons.
“This aspect of the policy, imposing financial levies on lodgements/deposits, in my view, appears unreasonable. And it makes no difference if same was applied throughout the federation or limited to only the residents of a few states.