Against the backdrop of widespread reports on hawking of new naira notes, the Central Bank of Nigeria (CBN) as part of protecting the integrity of the currency and stopping illicit flow, has said it would impose a fine of N150m on Deposit Money Banks (DMBs) aiding such practice.
A circular issued on Friday, December 13, 2024 and signed by the Acting Director of the Currency Operations Department, Mohammed Olayemi issued the warning to DMBs while frowning at the practice.
The Apex Bank has consistently preached against commodification of naira and it has in a November 13, 2024 circular warned against trading in naira notes by those it referred to as unscrupulous agents.
This was coming amidst the cash scarcity in the country which the bank has made efforts to address by reading riot act to DMBs to make cash available for Nigerians.
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The CBN Governor, Olayemi Cardoso had at the annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos recently assured that the bank would continue to “maintain a robust cash offering to meet the country’s needs, particularly during high demand periods such as the festive season and year-end.”
He said, “To address this, we are conducting spot checks across the Deposit Money banks, and we impose penalties on the underperforming institutions. Effective December 1. 2024, customers are encouraged to report any difficulties with joint cash from bank branches or ATMs directly to the CBN through designated phone numbers and email addresses for their respective states.
“Guidelines will be distributed widely to raise public awareness. We will also urge full regulative compliance by all stakeholders, including mobile money operators and POS agents, to promote digital transaction channels and improve service delivery. I repeat, financial institutions found engaging in malpractices or sabotage will face changing penalties.”
But the cash scarcity has persisted but despite this there have been reports of hawking of mint naira notes.
But the latest circular by the CBN said the apex bank is concerned about the increasing prevalence of mint naira notes being traded by hawkers.
The bank stated that the practice is impeding efficient and effective cash distribution to customers and the general public.
In the earlier circular issued in November, the apex bank stated that any branch of a financial institution found culpable will face a penalty of N150m for the first violation.
Subsequent infractions, the CBN stated, would attract stricter sanctions under the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The circular read, “The CBN has noted with dismay the prevalence of illicit flow of mint banknotes to currency hawkers and other unscrupulous economic agents that commodify Naira banknotes, thus impeding efficient and effective cash distribution to banks’ customers and the general public.
“CBN will continue to intensify the periodic spot checks to the banking halls/ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots across the country.
“In this regard, any erring deposit money banks or financial institutions that are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes shall be penalised at first instance N150,000,000.00 (One hundred and fifty million Naira) only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”
…Old Naira Notes remain valid
In another development, the CBN has clarified that the old naira notes of N1000, N500 and N200 remain valid.
The bank stated that it has observed the misinformation regarding the validity of the old ₦1000, ₦500, and ₦200 banknotes currently in circulation.
Ag. Director, Corporate Communications, Mrs. Sidi Ali Hakama explained that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the ₦1000, ₦500, and ₦200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadline.
“We, therefore, advise the public to disregard any claims that the old series of the aforementioned banknotes will cease to be legal tender on December 31, 2024. We urge Nigerians to continue accepting all Naira banknotes (both old and redesigned) for their daily transactions and to handle them with care to ensure their longevity.
“Furthermore, the general public is encouraged to embrace alternative modes of payment, such as e-channels, to reduce pressure on using physical cash.”
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