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CBN raises supply of lower naira denomination

By on April 15, 2014

As a result of complaints of scarcity of lower denomination naira across the country, the Central Bank of Nigeria (CBN),  yesterday indicated that it had increased the supply of banknotes to deposit money banks (DMBs).

The central bank explained that presently, there was sufficient supply of lower denomination notes, adding that it had directed all its branches to interface directly with members of the public, including shop owners to enhance easy circulation of the currency.

The CBN, which said this in a statement at the weekend, expressed concern over the unwholesome act of hawking the naira, dispensing it in parties and squeezing it.

Throwing more light on the circulation of unfit currencies in the country, the central bank said the failure of some banks to make the needed investments in currency sorting was responsible for the dirty naira notes  in circulation.
“The bank, in collaboration with law enforcement agencies, has taken steps to curb these acts. The CBN is also investigating to determine if any of its staff is involved in this criminal act and is prepared to take appropriate action against such staff.

“Any staff caught in this nefarious act will be punished,”it added.
Furthermore, it stated that there had been “misrepresentations and speculations regarding its role and mandate in the issuance and management of the national legal tender currency, the naira.”

The CBN Act 2007 empowers the CBN to among other mandates, issue legal tender currency in Nigeria and to promote a sound financial system in Nigeria.

Continuing, the Central Bank explained: “The CBN does not impose any charge on DMBs for currency sorting services for the purpose of pecuniary benefits.

“Instead it is the responsibility of each bank, as is the practice world over, to sort its own currency notes appropriately into “fit” and “unfit” categories before lodging them with the CBN.”

It however pointed out that in a situation where any bank fails to perform this responsibility; it plays the role on behalf of affected banks by sorting the banknotes, separating the fit notes from the unfit notes.
This service, according to the statement, attracts a legitimate charge of N12,000 per box on the bank that fails to sort its currency.

Thereafter, the fit notes are put back into circulation while the unfit notes are destroyed and new notes are reissued to replace them.

“What is happening is that banks have failed to make the needed investments in currency sorting and therefore resorting to re-circulating unfit notes. I can assure you that in due course something will be done to check this.

“It is pertinent to note that the CBN issues only clean and fit notes to the banks and can only replace unfit notes brought to it by the banks. Suffice to state that the CBN can only replace unfit notes that are brought to it by the banks which are the proper and natural interface with the general public,” it stated.

 

 

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