Nigeria: CBN Harps On Adoption of Digital Banking Channels, Moves Against Banks Loading Old Notes

23 January 2023

With seven days to the January 31, 2023 deadline for the phasing out of the old N200, N500 and N1, 000 banknotes, the Central Bank of Nigeria (CBN) at the weekend reiterated the need for bank customers to embrace its cashless policy and the use of alternative banking channels.

The central bank also alleged that commercial banks that continued to load their Automated Teller Machines (ATMs) with the old currencies were frustrating its naira redesign project.

Some CBN officials who spoke in Port Harcourt during a sensitation and public awareness exercise, also warned commercial banks against hoarding the new currencies.

That was as bank customers in Rivers State lamented poor circulation of the new bank notes.

In Yobe State, the governor, Hon. Mai Mala Buni, appealed to the CBN to extend the January 31 deadline for the return of the old N200, N500 and N1, 000 banknotes, saying residents of the state should be given special concession.

Buni's request came few days after governors of the 36 states under the aegis of the Nigeria Governors' Forum (NGF), said they were not opposed to the naira redesign project of the CBN.

However, in continuation of its public awareness and sensitisation exercise ahead of the January 31 deadline, the central bank has solicited the support of the Emir of Bauchi, Alhaji Rilwanu Sulaiman Adamu, to help in sensitising his subjects to deposit monies in their custody in the banks before it became too late.

Responding to complaints by customers, Branch Controller of the CBN in Port Harcourt, Mr. Maxwell Okafor, revealed that the apex bank disbursed about N2.5 billion of the redesigned banknotes to commercial banks in Port Harcourt daily. Okafor regretted that bank officials were frustrating the efforts of the central bank to ensure speedy circulation of the naira notes across Rivers State.

Okafor spoke also at the weekend during an on-the-spot assessment of banks' ATM galleries, sensitisation of traders and the general public on the notes, in Port Harcourt and Obio-Akpor local government areas of the state.

The CBN boss in Port Harcourt wondered why bank officials would not implement the directive of the apex bank even as the deadline of January 31 was fast approaching.

Okafor revealed that between last Thursday and Friday, the CBN dispensed over N4. 5billion to the commercial banks in the state capital.

Okafor, alongside Deputy Director, Strategy Management Department of CBN, Abuja, Emenike Eleonu, and other enforcement monitoring team members on the new redesigned notes, noticed at the various banks in Port Harcourt that some banks were hoarding the naira notes in their vaults.

Okafor said, "We have been monitoring the dispensing of the new naira notes and the impression we have is not encouraging. We have visited some banks and one of the banks we visited was not dispensing the new naira note. Their ATMs were not functioning even as early as the time we came. We had it on good authority that the banks received money from CBN. Some of these banks received money yesterday (Thursday) and the money is still in their vaults.

"There is no explanation for their actions and CBN has warned that there will be serious consequences for hoarding this new naira notes and giving it to special customers.

"We stopped dispensing old currencies since the new currency came out. There is no reason why the ATMs should not dispense money and the money they collected are in the vault."

Eleonu also said there was no doubt that some banks were trying to frustrate what CBN was doing. He said some of the banks had the new naira notes but are not dispensing it to customers.

Earlier, some bank customers in Port Harcourt decried scarcity of the redesigned currencies across banks in the state capital. The residents made the observation when the monitoring team from the CBN visited some of the commercial banks in Port Harcourt, as well as market places where they sensitised the public on the new notes.

Mr. Kwasendi Jimmy, a public servant at one of the First Bank branches on Aba Road, Port Harcourt, expressed dissatisfaction with the level of circulation of the new banknotes. He explained how he visited ATMs for days to withdraw cash but wasn't successful.

Jimmy alleged that the bank loaded the new currencies in the machine when it realised that the central bank officials were on a monitoring exercise.

Another resident, who spoke with THISDAY at Access Bank along Trans-Amadi road, Port Harcourt, said he visited the bank's ATM galleries but could not withdraw the new currencies.

At the Mile One market, Ama Ezekiel pleaded with the CBN to listen to public outcry and extend the date.

Ezekiel, a trader at the Rumuwoji Modern Market, Port Harcourt, said she was not against redesigning of the currency, but he rejected the deadline given for expiration of the old notes.

Mr. Chimezie Bright, who also trades at the Mile One Market, lamented the scarcity of the new notes at the banks.

In a related development, Buni said the appeal for an extension of the deadline became necessary due to lack of banking services in many parts of the state. The governor explained that only four out of the 17 local government areas of the state had banks, making it difficult for people in the remaining 13 local government areas to access banking services.

Buni said,. "Some of the banks with branches in the local government areas closed the branches at the peak of the Boko Haram security challenge but are yet to reopen in spite of the improved security in the state.

"The CBN should be considerate to provide special services to such areas with special needs to avoid making them victims and losing their money.

"The CBN and commercial banks should as a matter of urgent public interest deploy alternative services at their disposal to salvage the situation.

"As a regulatory body, the CBN should also ensure commercial banks open branches in the local government council headquarters now that there is improved peace and security across the state."

Buni said the improved security in Yobe State and the wider North-east generally make it conducive for the banks to resume operations and open new branches in the local government council headquarters and other towns.

He expressed fears that until something urgent was done, many people might not be able to change to the new notes.

The governor said, "As a government we made these observations earlier but the challenge is still there and needs the intervention of the CBN to save the situation."

In Bauchi, CBN solicited the support of the Emir to help in sensitising his subjects.

Director, Medical Service Department of CBN, Dr. Abdullahi Jibrin, who led other officials of the bank to the Emir's palace at the weekend, said the aim of the initiative was to mop up cash outside the banking system.

Jibrin stated, "From the basic rudiments of economics, once you have too much money in the hands of people, inflation goes up. So, we want to mop up, all money should be brought back into the bank and by so doing, inflation will go down."

He explained that the royal fathers were being involved due to their access to people at the grassroots to help enhance the awareness campaign effort of the CBN.

Jibrin added that with the help of the traditional rulers, 10 days was more than enough for the campaign to reach the grassroots.

"That is why we are pleading with them to partner with us so that we can reach down to the grassroots to enable us mop up the monies in their possession," he said.

The Director, Medical Service Department of the CBN stated that the top management of the bank had given approval that people in the rural areas who had N10, 000 and below could have them exchanged with the new Naira notes.

"Remember, what we are doing now is asking people to take their monies to their account, we are not exchanging, so, the only leeway given now is for N10, 000 and below for the downtrodden masses," he said.

While responding, the Emir of Bauchi commended the federal government and the central bank for initiating various monetary policies aimed at impacting positively the lives of the citizenry. He expressed hope that the policy being undertaken by the CBN would help in reviving the economy.

The Emir assured the CBN of the readiness of the traditional leaders to pass down the message to their subjects to enable them understand the reason behind the naira redesign.

He said, "The initiative has been given different interpretations, but thank God that we have also come to realise what the policy is all about. We will inform our people that the policy was not initiated to cause any problem, but to help the masses and help the economy of our country."

Similarly, in Akwa Ibom State, CBN yesterday called on Nigerians to embrace the cashless policy. Deputy Director of CBN, Mr. Dominic Ekanemesang, made the call when officials of the bank visited the Sacred Heart Catholic Parish, Aka Offot, in the Akwa Ibom State capital, for a sensitisation campaign on the redesigned naira notes. Ekanemesang stressed that CBN was committed to achieving a cashless economy, aimed at reducing too much money in the circulation. He emphasised the importance of the cashless economy in tackling illicit financial transactions in the country, including terrorism financing and money laundering.

Ekanemesang said, "We are here to carry out sensitisation on the new currency redesign. And we are carrying out this across all the 36 states of the federation and the Federal Capital Territory (FCT).

"The benefit of the new currency redesign is to ensure that the CBN monetary policy is effective. We are moving to cashless economy to ensure that we don't have too much money in circulation. The essence of the currency redesign is to ensure that the monetary policy of the CBN is achieved. We want to safeguard the financial system.

"I'm sure all of us are aware that we have new notes, and that after January 31, the old notes will cease to be legal tender.

"You are aware that the three higher denominations are being used for illicit transactions, such as kidnapping, terrorism financing, and money laundering.

"Also we want to drive financial inclusion, to bring the citizens into the financial system. So if you don't have a bank account this is the opportunity for you to go and open a bank account and deposit the old notes into your account. So, please, this is an appeal so that you don't lose your money."

In Imo State, CBN disclosed that one of the reasons for redesigning some naira denominations was to curb hoarding. It said, according to statistics, N2.72 trillion out the N3.26 trillion currency in circulation as of June 2022 was outside the vaults of commercial banks across the country and probably held by members of the public.

This was revealed at the weekend, during the sensitisation on the features of the newly redesigned naira notes to traders at the Alaba Autoparts market and World Bank Market, all in Owerri, capital of Imo State.

In her remarks, Branch Controller of CBN in the state, Mrs. Oruwari Boma, disclosed that statistics also showed that 84.71 per cent of the currency in circulation was outside the vaults of commercial banks with only 15.29 per cent at the central bank and commercial banks' vaults.

Boma pointed out that another reason for redesigning the naira was the worsening shortage of clean and fit banknotes. She said this caused negative perception of the CBN, increased risk to financial stability, and increased ease by criminal and risk of counterfeiting evidenced by several security reports.

Boma encouraged the traders to embrace the new policy of the bank by making sure that they deposited the old notes at the commercial banks before January 31.

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