The Central Bank of Nigeria (CBN) says cashless financial services will commence in Kwara on July 1.

The Acting Governor of CBN, Dr Sarah Alade, made this known on Tuesday in Ilorin during a stakeholders forum and sensitisation exercise on the apex bank’s cashless policy.

She said that the sensitisation programme would be extended to both the formal and informal sectors.

Alade, in a keynote address, said six states and Abuja, the Federal Capital Territory, had started the implementation of cashless policy.

Mr Sunday Olatewo, the Branch Controller of CBN in Ilorin, who represented Alade, said the bank and the Nigerian Bankers Committee inaugurated a study in 2010 to identify ways of enhancing service delivery in the nation’s financial sector.

The acting governor said the study revealed high cash usage in the economy and its attendant high cost implication in the financial value chain.

Alade said at least 30 per cent of branch physical space and employees was devoted to cash logistics, handling and storage, adding that this accounted for an estimated 30 per cent of the operational costs in the financial system.

“The total cost of the financial system was projected to surpass N190 billion by the end of 2012 if nothing was done.

“The cost excluded production, distribution, processing and destruction by CBN,’’ Alade said.

She said that the aim of the cashless policy was to reduce the use of physical cash for payment and not eliminate it totally.

According to the acting governor, the cashless policy would also reduce robbery, cash related crimes, kidnapping, election rigging, revenue leakage and corruption.

Alade also said that the Nigeria Electronic Fraud Forum was inaugurated to raise the level of awareness on vulnerabilities that exist on the e-channels.

“Exchange of fraud information among institutions has also been encouraged with the view that as a system, we are only as strong as our weakest link,’’ she added.

Olatewo, however, told newsmen after the forum that cash transactions below N500, 000 and N3 million would still be allowed for individual and corporate bodies respectively.