CBN Directs Banks To Suspend Charges On Cash Deposits

…Puts Cash In Hands Of Nigerians At N3.2trn

The Central Bank of Nigeria in a bid to ensure smooth transition from existing naira bank notes to new notes, has suspended the bank charges imposed on cash deposits.

The CBN Governor, Mr. Godwin Emefiele said the suspension which takes immediate effect is to encourage bank customers to swap their existing N100, N200, N500 and N1,000 bank notes with the redesigned version.

Effective January 31, 2023, the existing N100, N200, N500, and N1,000 banknotes will cease to be accepted as a medium of exchange for any transaction conducted in Nigeria.

Emefiele said the apex bank, in line with global best practices has received the approval of President Muhammadu Buhari to redesign the bank notes new with new features.

He said when effective from December 15 this year, Nigerians who are in possession of the old notes should approach their banks for the new notes.

Explaining the rationale for the move, he said recent development in photographic technology and advancements in printing devices have made counterfeiting of currencies relatively easier.

According to him, the CBN had in recent times recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.

He also stated that there has been significant hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of currency in circulation are outside the vaults of commercial banks.

Emefiele warned Deposit Money Banks to ensure that no bank customer bears any charges for cash returned/paid into their accounts.

He said, “Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them withdraw the new banknotes once circulation begins in mid-December 2022.

“All banks are therefore expected to keep open, their currency processing centers from Monday to Saturday so as to accommodate all cash that will be returned by their customers.

“For the purpose of this transition from existing to new notes, bank charges for cash deposits are hereby suspended with immediate effect.

“Therefore, DMBs are to note that no bank customer shall bear any charges for cash returned/paid into their accounts.

“Members of the public are to please note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.”

On whether the CBN decision will not adversely impact on bulk of people in the rural areas, he said it will affect those without a bank account.

Emefiele added, “It will impact them particularly those who do not have bank account, we will be introducing a number of tokens and where people in our rural areas who do not have bank account, you should be able to conduct bank services without bank account.

“However, if you are carrying cash you can go to the nearest bank branch, they will take your cash and open an account for you for the purpose of returning the naira right into the bank’s vault and then collecting the new naira when we begin to release them.

“We will continue to fine tune this program to see to it that we won’t make life difficult for all Nigerians but you all must agree that this trend of lots of money out of circulation out of the bank vault is unacceptable.

“Imagine doubling of the size of naira in circulation from N1.46tn in 2015, N3.23tn in September 2022, its unacceptable and it takes the control of money supply out of the hands of CBN.”