CBN mulls end to unfit, dirty notes in circulation

CBN mulls end to unfit, dirty notes in circulation

May 01,2019

CBN Governor, Godwin Emefiele, who gave the assurance in his address at the launch, said the bank has the responsibility of preserving the integrity of the Naira and sustaining public confidence in the national currency as enshrined in Section 2 of the CBN Act 2007.

To achieve these, the bank, he said, strives to ensure an optimal supply of clean and quality banknotes in a balanced denominational mix to meet public demand, while also maintaining a balanced currency structure that is both efficient and cost effective.

Represented by the Deputy Governor, Operations, Ade Shonubi, he however, noted that the responsibility for clean notes in circulation is not exclusively that of the bank, rather a collaborative effort between the central bank, banknote suppliers, deposit money banks (DMBs), manufacturers of currency management equipment, currency transportation and processing companies, security agencies, and the general public.

“Currency management is vital to our daily lives because despite the improvements in electronic payments system, banknotes remain predominant for payment and settlement of commercial transactions in Nigeria,” he said.

Meanwhile, he said that eight companies have been registered to carry out Cash-In-Transit (CIT) and two others as Cash Processing Companies (CPC, while commercial banks are expected to patronise only these registered companies.“CBN, as part of efforts towards devolving the retail cash management to the private sector, has approved the revised guidelines for registration of CIT/CPCs. These guidelines provide for the operation of CITs and CPCs at both National and Regional levels.

“It is hoped that this would encourage unregistered companies to come under the regulatory purview of the Central Bank and ensure a nationwide coverage of these services,” he added.

Similarly, the Director of Currency Operations, Mrs. Priscilla Eleje, has said that the banks are now incentivized to perform their functions under the new directive, as the processing charges for deposit of lower denomination banknotes have been reduced to N5 from N50.

While the move was to encourage the return of unsorted banknotes to CBN for processing, she warned that the new move to ensure clean naira notes in circulation comes with sanctions for non-compliance.

According to her, banks must now accept mutilated and unfit notes from customers and return them to CBN, as it is now a collective effort to end dirty notes in circulation.She also said the CBN has put in place strategies to enable direct disbursement of lower banknotes to various market associations and merchants through their respective commercial banks.So far, the intervention, which commenced in Abuja, has been extended to Lagos, Kano, Enugu, Umuahia, Yola, Jos, Gombe, Asaba, Ibadan, Kastina, Uyo, Minna and Port Harcourt.