The statement came after a consultative meeting between the management of the Central Bank and the Managing Directors of the commercial banks operating in South Sudan
By Anak Dut and Emmanuel Mandella
The Governor of the Bank of South Sudan (BoSS), Johnny Ohisa has lifted the SSP 10 million cash withdrawal restriction that limited clients from withdrawing excess money from their accounts.
This came after a consultative meeting between the management of the Central Bank and the Managing Directors of the commercial banks operating in South Sudan, in Juba on Thursday.
In a statement issued yesterday, Governor Ohisa reaffirmed the commitment to rebuilding trust between the Central Bank and commercial banks on one hand and the public on the other hand.
He said the meeting focused on finding amicable solutions aimed at resolving current liquidity challenges facing the banking sector and the public in general.
“Specifically, the meeting noted with concerns the public hoarding of cash without depositing into the banks due to mistrust in the banking sector. In a joint statement, the Central bank and Commercial banks resolved to work together in resolving this matter,” he said.
“The Central Bank governor gave directives to lift Ten million South Sudan pounds (SSP 10,000,000) cash withdrawal limits by clients from individual accounts,” the statement read in part.
To strengthen public confidence in the baking system, the Central Bank has urged commercial banks to offer interest in saving accounts to encourage customers to deposit more money into their accounts.
On September 16, 2024, Dr. James Alic Garang the former governor of the Bank of South Sudan banned the excessive withdrawals of cash from all banks across the country.
“The maximum cash withdrawals across all channels at the Bank of South Sudan and all commercial banks shall not exceed SSP 10,000,000,” the statement stated.
Withdrawals exceeding SSP 10million were either to be deposited through a bank account within the banking industry or through interbank transactions, including mobile money operators.
“The bank will further enforce compliance with ex-ante AML/CTF [Anti-Money Laundering Countering the Financing of Terrorism] regulations relating to KYC [Know Your Client] and customer due diligence”, the Central Bank noted.
Johnny Ohisa, the Governor of Bank of South Sudan, meets Managing Directors of commercial banks in South Sudan on Thursday. [Photo: Courtesy]
In the September 2024 circular, the bank encouraged clients to use alternative authorized channels to conduct their banking transparency, thereby fostering the digitization of financial services.
“All commercial banks and mobile money agents are important participants in the finance system, enabling access to financial services in the underserved and rural communities,” the statement read in part.
The Bank of South Sudan urged all the employees in public and private sectors to open bank accounts.
Push for digital Banking
During an interview with state television, SSBC, in October this year, former Central Bank Governor, Dr. Dr. James Alic Garang, re-emphasized his push towards digitalizing the country’s financial services. Dr. Alic outlined the numerous benefits of a digital economy, emphasizing how it could transform both individual financial transactions and the broader macroeconomy.
He highlighted the advantages of transitioning from cash-based transactions to digital payments, citing the speed, convenience, and improved record-keeping that come with digital platforms.
“The benefits of a digital economy is why we need to digitalize the financial services; it reduces the risks associated with current cash. For record-keeping purposes, there’s always an electronic trail when you send through digital means of payment. Additionally, digital payments significantly reduce transaction costs. You are just a click away, and the money is transmitted instantaneously,” said the ex-governor.
Dr. Garang also noted that digital payments could be a game-changer for the government’s tax collection efforts. “Once you digitalize, you can easily track taxes for those who are paying,” he said. “For the broader economy, digital payments stimulate economic activity. The sky is the limit for what this can achieve.”
He further explained how digital payments could enhance regional trade, making it easier for citizens to transfer funds across borders. “You want to transfer something digital to your family in Kenya? Click away. You want to do that in Uganda? Just click away,” he said, emphasizing that digital payments are the future.
However, in our exclusive interviews with some of the members of the public over the move by the Central Bank to digitize financial transactions, Sarah Wani, a small business owner in Juba, lauded the move. “Digital payments will help my business grow. I often struggle with handling cash, and the speed of transactions will save time.”
Others, on the other hand, were cautious. James Maridi, a farmer in Yambio, pointed out concerns regarding access to reliable digital infrastructure. “The idea sounds great, but in rural areas like mine, we still face network issues. How will we fully benefit from this?”
“South Sudan must address its technological gaps. Otherwise, the benefits of a digital economy will be uneven, particularly for those in rural areas where digital services are limited,” warned financial analyst.
With the central Bank now reversing its earlier decision to limit cash transitions as a way of encouraging digitization of financial services, it remains to be seen how the market with adjust to the new measures.
Also, it will be on the commercial banks to find attractive and convincing ways of getting the public to consider depositing money in the banks, rather than stacking cash in their homes.
Financial analyst Michael Kenyi has called for installation of confidence in the public and strengthening of the sector to restore full confidence on the potential depositors. Terming the move by the Central timely and positive, Kenya challenged the sector to ensure financial inclusion in the country.
“The decision is bold, timely and necessary,” Kanyi said.
“Specifically, the meeting noted with concerns the public hoarding of cash without depositing into the banks due to mistrust in the banking sector. In a joint statement, the Central bank and Commercial banks resolved to work together in resolving this matter,” a statement by the Bank of South Sudan (BoSS).