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New Banknotes: CBN intensifies measures to meet deadline

The Central Bank of Nigeria (CBN) has, in the last fortnight, ramped up measures to ensure that it meets the January 31 deadline that it set for the implementation of its naira redesign policy, writes Tony Chukwunyem

Clearly, the last two weeks have been hectic for top officials of the Central Bank of Nigeria (CBN) as they were all over the country, carrying out the sensitisation of stakeholders on the apex bank’s currency redesign policy as well as stepping up their monitoring of commercial banks to ensure that the lenders’ Automated Teller Machines (ATMs) are dispensing the new banknotes in line with its directive. Right from October 26 last year, when CBN Governor, Mr. Godwin Emefiele, announced that the apex bank, with President Muhammadu Buhari’s approval, had concluded plans to redesign three- N200, N500 and N1,000-of the eight existing denominations of the country’s legal tender and that the new notes, which would be in circulation from December 15, 2022, would circulate together with the old notes until January 31, 2023, when the latter would cease to be legal tender, the regulator had always insisted that the deadline was sacrosanct. But with less than two weeks to the expiry of the deadline and with members of the public complaining loudly that they were not getting the new naira notes from the commercial banks, the CBN had to make efforts to address the problem-hence the sensitisation campaign. As reported by New Telegraph, CBN officials commenced the sensitisation of stakeholders on the new banknotes, penultimate week, at popular markets in major cities across the country, such as, Lagos, Abuja, Onitsha and Kano. However, the sensitisation campaign intensified throughout the country last week as apex bank officials, apart from engaging with members of the public on the policy, also began monitoring and inspecting commercial banks’ ATMs to find out if the machines were dispensing the new naira notes.

Ikeja Computer Village

For instance, the Director, Legal Services Department at the CBN, Mr. Kofo Salam-Alada, led the team that engaged with stakeholders at the Computer Village, Ikeja, in Lagos last Wednesday. Salam-Alada, who represented CBN Governor, Mr. Godwin Emefiele, at the event, said the apex bank was aware of widespread complaints across the country about the non-availability of the new bank notes and had taken steps to address the problem.

He reiterated that the CBN had sufficient quantities of the new naira notes in all its 37 branches and blamed DMBs for challenges that members of the public were facing in trying to access the new banknotes. He said: “I can tell you today that the CBN on a daily basis, issues out the new notes. I must let you know that we are actually begging commercial banks to come and take money from the central bank. We have this new money in our vaults and we are waiting for the banks to come and take it. I must also let you know the seriousness of the central bank for these new notes to permeate everywhere.

“We have found out that a lot of things have come up that we need to checkmate. We stopped withdrawal across the counter of new naira notes to ensure that everyone can have access to it and it would not be just one Chief who is known to a Manager and then would walk in there and cart away all the new naira notes in a particular branch.”

He further stated: “Part of what we are doing is that we have monitors going around banks now. I have been to some ATMs this morning and I have lodged reports. I have spoken to the management of the various banks. And any bank I speak with their headquarters, I ask them where is the money we gave you? And we start hearing their explanations.

“We are not mobilising masses against the banks; the banks are there to serve you and be rest assured that they will serve you now that they know that the central bank is on them to serve you with the new naira notes. What you have been experiencing will ease off very soon because the banks know that there will be penalty for failing to come and pick money from central and from failing to actually lodge that money into their ATMs.”

The CBN Director, who urged members of the public to continue depositing their old notes into their bank accounts, said that the initial challenges that the naira redesign policy faced had been addressed and that the new notes would be more widely available in the days leading to the January 31 deadline set by the regulator. According to him, the CBN holds weekly meetings with the commercial banks to tackle issues that arise with regard to the implementation of the naira redesign policy. He directed CBN officials at the event to give out some telephone numbers that members of the public can call to report any bank that fails to dispense the new notes through its ATMs. On whether the CBN was considering extending the January 31 deadline, he said that there were no such plans, adding that the deadline remained sacrosanct.

He commended leaders of various associations at the Computer Village for collaborating with the CBN on the sensitisation campaign, stressing that the naira redesign policy would not only help boost economic growth but also aid the country’s anticorruption war given that the new notes can be tracked. After the event at Computer Village, Mr. Salam-Alada led the CBN team on a courtesy visit to the Palace of the Olu of Ikeja Land, where they were received by the Olukosi of Ikeja, High Chief Lateef Oluseye. At the Olu’s Palace, the CBN Director restated the objectives of the naira redesign policy and sought the traditional ruler’s support to ensure its success.

Inspection of ATMs The ATM monitoring team continued with their assignment in various parts of the country last Thursday and Friday, a development that resulted in many commercial banks scrambling to load their ATMs with the new notes. For instance, a visit to branches of commercial banks in Lagos by New Telegraph correspondent in Lagos last Thursday indicated that many of the lenders had either loaded their ATMs with the new notes or were preparing to do so.

Indeed, the head office branches of some of the banks on Lagos Island were not initially dispensing new notes, but upon enquires from CBN monitoring team members, they began to dispense the new banknotes. Speaking with journalists after the visit of the monitoring team to the head office branch of Tier 2 bank, a Deputy Director at the CBN, Mr. Seyi Badmos, stressed that all DMBs had been adequately supplied with new notes and that the data on how much was given to each bank was enough evidence to show that they should be able to comply with the directive to dispense the notes via the ATMs. He said: “The data we have confirms that all banks should have new notes to dispense and for the banks that claim they don’t have, our monitoring team nationwide is going around to confront them with the data and we would ensure that they fully comply.”

Sanctions

Similarly, a Director at the CBN/ Managing Director NIRSAL Microfinance Bank, Dr. Abdullahi Kure, who led CBN’s monitoring team in some parts of Abuja, last Thursday, warned that commercial banks found not to be dispensing old currencies via ATMs would be sanctioned. He said the CBN would check its records to ascertain quantity of new notes given to banks found to be dispensing old notes via ATM. Kure urged Nigerians to return old notes in their possession through established various pay points channels in return for new ones.

The CBN monitoring team had earlier, visited Ona of Abaji and Chairman FCT’ Council of traditional rulers, Dr. Adamu Yunusa and the Director International Center for Islamic culture and education/ Custodian of Alnoor mosque in Abuja , Dr. Kabir Usman, to sensitize their followers and subjects on the importance of changing their old notes to new ones. At the Ona of Abaji palace, Kure told the traditional ruler that the CBN team came to enlist his cooperation in sensitizing his subjects to return old notes in their possession through designated channels such as POS, agents banking outlets for new notes.

“We are taking this message to all nooks and crannies of FCT. We are here to solicit your support to help us convey the messages to your subjects”, the CBN Director said.Responding, Dr. Yunusa pledged to convey the CBN’s message to his people, and commended the team for the visit. The Coordinator of Alnoor mosque, Dr. Kabir Usman, said the banknote redesign policy note was not peculiar to Nigeria as countries like the United kingdom, Japan and South Africa, had carried out similar exercises in line with the economic situation of their countries. He commended the CBN team for embarking on the on- spot assessment of ATMs noting that, it will give the apex bank first-hand information about the commercial banks’ compliance.

Cash swap programme

However, aside from intensifying its monitoring of lenders, the CBN, over the weekend, announced that it was introducing a cash swap programme in villages and financially excluded areas that would be launched on January 23, 2023 in partnership with super agents and DMBs. According to the apex bank, under the programme, rural dwellers and participants will pay agents an unspecified amount as fee to swap their old notes for new N1,000, N500 and N200 notes. It also stated that the lower denomination notes like the N100, N50, N20 among others could be swapped for the new naira notes.

Specifically, the CBN stated: “The agent shall exchange a maximum of N10,000 per person. Amounts above N10,000 may be treated as cash-in deposit into wallets or bank accounts in line with the cashless policy. BVN, NIN, or Voter’s card details of the customers should be captured as much as possible. “To promote financial inclusion, this service is also available to anybody without a bank account.

Agents may, on request instantly open a wallet or account, leveraging the CBN Tiered KYC Framework. This will ensure that this category of the populace are able to exchange or deposit their cash seamlessly without taking unnecessary risk or incurring undue cost. “Agents shall sensitise customers on opening wallets/ bank accounts and the various channels for conducting electronic transactions. “Designated agents are eligible to collect the redesigned notes from DMBs in line with the Revised Cash Withdrawal Limit policy. Agents are also permitted to charge cash-out fees for the cash swap transactions but prohibited from charging any further commissions to customers for this service.”

Conclusion

The consensus in financial circles, over the weekend, was that while the new measures introduced by the CBN in the last few days would significantly help to make the new naira notes available to more Nigerians before the January 31 deadline, the apex bank may still have to consider extending the deadline in order to give as many Nigerians as possible the opportunity of exchanging

 

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