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Friday, January 27, 2023

CBN warns banks against hoarding of new naira notes, rejection of old notes

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Central Bank of Nigeria (CBN) has threatened severe sanctions against any bank hoarding the new currency notes and or rejecting the old naira notes before the 31st January deadline.

The CBN also warned that commercial banks which failed to collect their allocations of the new currency notes or flout the directives on their distribution would be sanctioned.

The warning was disclosed on Thursday by Director, Corporate Communications Department of the CBN, Mr Osita Nwanisiobi during sensitisation of Aba traders on the new Naira notes at Aba, Abia State.

He reiterated that the January 31 deadline for the use of the old currency notes as legal tender was sacrosanct, adding that anyone who failed to deposit the old currencies would no longer be able to do so after the deadline.

Nwanisiobi dismissed the speculations that the policy was targeted at anybody. He said the policy is a necessary measure to bring back larger chunk of money in circulation into the banking system.

He regretted that too much cash in circulation was outside the banking system, a development, he said was weakening the economy.

According to him, about N2.76 trillion out of N3.26 cash in circulation is outside the banking system.

He, therefore, pleaded with Aba traders and residents of Abia State, to beat the rush by going to the banks to deposit the old currencies ahead of the deadline.

Nwanisiobi, however, warned against rejecting the old Naira notes before the deadline, saying they remain valid legal tender until January 31.

He also warned against hoarding the new currency notes, assuring that the CBN has enough new Naira notes to take care of the demands.

On the guidelines concerning the distribution of the new currency notes, Nwanisiobi said it should not be picked over the counters in the bank but only via the Automatic Teller Machines (ATM), warning that any bank dispensing it over the counter will be disciplined.

He explained that the new Naira notes had enhanced security features making it difficult to be faked, and urged people not to reject them.

Nwanisiobi, however, said that anyone caught abusing the new currency would be prosecuted.

He equally explained that part of the reasons for the new policy on currency was to encourage people to embrace other modes of payments in lieu of cash transactions as obtains in civilized societies.

He also said it was aimed at reducing the cost and risk of managing cash, and to withdraw mutilated currency notes in circulation.

The CBN Spokesperson who led other officials of the apex bank to monitor compliance in some banks in the state, noted with detest that some banks still dispensed old currencies in their ATMs.

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