Cancellation of ATM Withdrawal Charges and the Cash Policy in Nigeria

The cancellation of the N100 charge per unit withdrawal from ATM on December 17, 2012 in Nigeria has the capacity to reduce cash demand, in line with the prediction of the Tobin-Baumol model of cash inventory/money demand. This possible effect of the cancellation policy on effectiveness of the Central Bank of Nigeria’s (CBN) Cash Policy in terms of cash demand reduction is yet to be thoroughly examined and documented in the literature. This study fills the gap by examining the effects of the policy that cancelled the ATM withdrawal charges on cash demand and effectiveness of the Cash Policy, using data collected from 200 bank customers in Osogbo, Osun state. The results show that the cancellation policy reduced idle cash balances as people felt free to withdraw as many times as desired since there was no penalty on frequent withdrawals. The study thus concluded that the cancellation of ATM charges and the engendered reduction in cash demand may enhance the Cash Policy, while the policy that re-imposed penal charges may undermine it.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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How to Cite This Article

Dr. Ibrahim Alley. 2016. \u201cCancellation of ATM Withdrawal Charges and the Cash Policy in Nigeria\u201d. Global Journal of Management and Business Research - B: Economic & Commerce GJMBR-B Volume 16 (GJMBR Volume 16 Issue B3).

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GJMBR Volume 16 Issue B3

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-B Classification JEL Code: H00

Submission ReceivedDecember 7, 2015
Peer Review Double Blind
Handling Editor
Accepted January 5, 2016
Published January 15, 2016

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v1.2

Issue date

April 6, 2016

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Article Matrices

Total Score: 108

Country: Nigeria

Subject: Global Journal of Management and Business Research - B: Economic & Commerce

Authors: Alley, Ibrahim Saliu, Adebayo, L. A. , Oligbi, Blessing, Lawal, Amdalat. T (PhD/Dr. count: 0)

View Count (all-time): 232

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Publish Date: 2016 04, Wed

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Total Views: 4155

Total Downloads: 1918

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