With four weeks to go before the deadline, bank ATMs are still dispensing old naira notes
Nairametrics’ findings have shown that most bank ATMs across the country are still dispensing old N1,000 and N500 notes, just four weeks before the deadline set by the main bank.
The old N1,000, N500 and N200 notes will be decommissioned at the end of January 2023, following the launch of new notes by the Central Bank of Nigeria in December last year.
Remember that the CBN had announced in October 2022 the redesign of the N200, N500 and N1,000 banknotes in an attempt to curb counterfeiting and take control of the currency in circulation.
What the CBN said: According to the main bank’s governor, Godwin Emefiele, the new and existing naira notes will remain legal tender and will circulate together until January 31, 2023, when the existing coins will become legal tender.
“For the purposes of this transition from existing to new notes, bank charges for cash deposits are waiving at this time effective immediately. Therefore, DMBs should note that no bank customer will be required to pay any fees for cash returned/paid to their accounts.” “Members of the public should note that these notes remain legal tender and should not be rejected as a medium of exchange for the purchase of goods and services,” the bank stated.
Old ATM bills: Meanwhile, several Nigerians have complained that most ATMs are still dispensing old notes, with less than four weeks to go until the deadline, while others told Nairametrics that they have yet to see or feel the new notes.
Nairametrics research notes that several ATMs across the country still dispense the old naira notes. In several southeastern states, tourists confirm that old naira notes are still being dispensed at ATMs. The same was observed in parts of the south-west, north-western states and in the FCT, Abuja. Our findings also indicate that N1000 notes were the most commonly loaded at ATMs and dispensed.
The National Assembly rejects: Recently, the Nigerian Senate increased pressure on the Central Bank of Nigeria (CBN) to extend the deadline for the withdrawal of old naira notes from January 31 to June 30, 2023.
Senator Ali Ndume cited Orders 41 and 51 to request authorization from the Senate to present a motion on the urgent need to extend the withdrawal from circulation of the old coin. In addition, Senator Uzor Kalu also urged the CBN to go “until the end of April to allow people to deposit their cash in banks.” The House of Representatives also requested CBN to stop the cash-out policy (which is also linked to the introduction of new naira notes) and invited the CBN Governor (who was out of the country) to appear before it to explain the reason for the movement.
It is important to add that the Senate supported the introduction of new naira notes.
Without term extension: Central Bank of Nigeria Director of Currency Rasheed Adams, in a press briefing after the MPC meeting in November, noted that there will be no extension of the deadline for old notes, stating that the bank had received a sum of 165,000 million naira. of old banknotes as of November 2022.
According to the Central Bank’s countdown clock, which it released on its website in early December, the current series of notes will be seized to maintain legal tender for 25 days. However, a major question raised by analysts is whether the remaining 25 days will be enough to swap old notes for new ones. The decision to stay short-term comes in the wake of the major hoarding of nairas, which is believed to be fueling the rising inflation rate in the country, which is already at a 17-year high despite monetary measures taken by the central bank. In an attempt to meet the deadline, the CBN told commercial banks to work on Saturdays. CBN also told Nigerians in the diaspora that it will not wait for them to replace the old naira notes beyond the January 31 deadline.
However, older naira notes are still in circulation, casting a cloud of doubt over the January 31 deadline.
Secondly, the CBN revealed its plans to reduce the volume of higher denominations in circulation, citing that the volume of N1,000 and N500 in the economy is fueling Nigeria’s high inflation rate.
This informed the reduction of the maximum daily withdrawal limit for OTC products to N500,000 and N5 million for individuals and companies respectively. Along the same lines, the main bank also ordered banks to restrict ATM cash dispensing to a maximum of N200 notes to reduce the volume of higher denominations in the economy.