CBN to release resigned Naira notes in December

The new naira notes redesign by the Central Bank of Nigeria (CBN) will go into effect in the middle of December 2022, CBN Governor Godwin Emefiele said on Wednesday during a press conference.

Emefiele claims that the new notes come in denominations of N200, N500, and N1000.

When the new banknotes start to circulate, he recommended Nigerians to take their old ones to the bank so they may withdraw them.

The CBN governor noted that the decision was made as a result of ongoing issues with the management of the current series of banknotes and currencies in circulation, particularly those outside of Nigeria’s banking sector.

He claimed that recently, currency management has had to deal with a number of difficult problems that have only gotten bigger and more complex, with unforeseen effects on the CBN’s and the nation’s integrity.

The enormous hoarding of banknotes by the general public, with statistics suggesting that more than 80% of the cash in circulation is outside the vaults of commercial banks, is one of these issues, according to Emefiele.

According to the CBN’s data, as of the end of September 2022, N2.73 trillion of the N3.23 trillion in money in circulation was allegedly kept by the general public outside the vaults of commercial banks across the nation.

Evidently, the amount of money in circulation has increased significantly during 2015, from N1.46 trillion in December to N3.23 trillion in September. We must permit this concerning tendency to continue, Emefiele added.

The lack of clean and suitable banknotes, which has a negative impact on public view of the CBN and raises the risk of financial stability, as well as the ease and risk of counterfeiting, both of which are growing, are other difficulties mentioned.

The governor of the top bank also noted that recent developments in photographic and printing technologies have made counterfeiting considerably simpler.

According to Emefiele, “the CBN has recorded significantly higher rates of counterfeiting in recent years, particularly at the higher denominations of N500 and N1,000 banknotes.”

The naira has not undergone a redesign in the past 20 years, despite the fact that it is considered best practice for central banks to redesign, create, and circulate new local legal money every five to eight years.

The management of the CBN requested and received President Muhammadu Buhari’s approval to redesign, produce, and circulate new series of banknotes at N200, N500, and N1,000 levels in accordance with provisions of sections 2(b), section 18(a), and sections 19, subsections (a) and (b) of the CBN Act 2007. We have finalized the plans for the new currency to go into circulation on December 15, 2022, in accordance with this approval. Together, the new and old currencies will continue to be accepted as legal money.

Accordingly, all deposit money banks (DMBs) holding the current currency denominations may start surrendering these notes to the CBN right away. On a first-come, first-served basis, the banks will receive the newly created currency.

Customers of banks are urged to start depositing existing cash into their accounts so they can withdraw the new banknotes once circulation starts in mid-December 2022. Therefore, it is expected that all banks would maintain their currency processing facilities open from Monday through Saturday in order to accept all cash that their clients will return.

Bank charges for cash deposits are hereby discontinued with immediate effect for this changeover from old to new notes. DMBs should be aware that no bank customer will be charged for cash that is returned or deposited into their accounts. Please take notice that the current notes are still valid forms of payment and should not be refused when used to pay for goods and services.

Emefiele continued by saying that the redesign of the currency will complement enhanced eNaira minting and further CBN’s efforts to establish a cashless economy.

This, he claimed, would further constrict the flow of money into the banking system, improving the effectiveness of monetary policy.

Emefiele said that in view of the current level of security situation in the country, the CBN is convinced that the incidents of terrorism and kidnapping would be minimised as access to the substantial amount of money used as a source of funds outside the banking system for ransom payments will begin to dry up.