CBN threatens to sanction banks for rejecting old Naira note
The Central Bank of Nigeria (CBN) has threatened to sanction Deposit Money Banks (DMBs) for rejecting over circulated /mutilated banknote in circulation.
The Acting Director, Currency Operations Department, CBN, Mr. Solaja Mohammed in signed circular COD/DIR/INY/CI/001/018 dated June 28, 2024 that was posted on the apex bank’s website on Wednesday stated that t has received several report of rejection of dirty/mutilated Naira banknotes by some DMBs.
He stated that, “Consequently, it has become imperative to remind DMBs that the CBN circular dated July 2, 2019 reference number COD/DIR.GEN/CIR/01/006, which prescribes penalties for the rejection of Naira banknotes, is still enforceable and binding on erring DMBs.
“Going forward, the CBN shall not hesitate to apply strict sanctions on DMBs, who are reported to have rejected deposits of Naira banknotes from the public under any guise.”
The CBN on Tuesday had warned against the continued rejection of old series and lower denominations of the United States of American dollars by its regulated entities in Nigeria.
The bank threatened to sanction lenders that rejected the currencies.
This was contained in a circular dated June 27, signed by the acting director of the currency operations department, which was recently released on the website of the apex bank.
The circular directed at DMBs, Bureau De Change operators and the general public cautioned against the continued rejection of the old series and lower denomination of the American greenback.
CBN said the fresh circular followed the outcome of its consumer market intelligence, which revealed the continued rejection of old/lower denominations of dollar bills by banks and other authorised forex dealers.
“Kindly be reminded that the Central Bank of Nigeria circular referenced COD/DIR/INT/CIR/001/002 and dated 9th April 2021, which explicitly frowned at this selective acceptance of deposit, is still in force and must be adhered to and complied with by all relevant parties.
“For the avoidance of doubt and further guidance on the circular, the content is hereby reissued as follows for strict compliance: All DMBs /authorized forex dealers should henceforth accept both old series and lower denominations of United States Dollars that are legal tender for deposit from their customers. The CBN will not hesitate to sanction any DMB or authorised forex dealers who refuse to accept old series/lower denominations of US Dollar bills from their customers,” the circular partly read.
The circular also warned authorised forex dealers against defacing/stamping US Dollar banknotes as such notes always fail authentication tests during processing/sorting.
CBN first issued the warning in a circular signed by then director of the currency operations department, Ahmed Umar, on April 9, 2021.
