The new N1000, N500 and N200 notes go into circulation today as the Deposit Money Banks have released the bills to their customers via over-the-counter payments.
The old notes will be phased out as legal tender by 31st January next year.
Three weeks ago, President Muhammadu Buhari unveiled the new bills at a weekly Federal Executive Council meeting in Abuja.
In October, Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele announced that apex bank would release re-designed naira notes by 15th December.
He explained that the redesigning of the Naira notes would help to curb counterfeit notes, and reduce ransom payments to terrorists and kidnappers.
The CBN boss said it was worrisome that 85 percent of the currency in circulation was being hoarded by Nigerians.
Emefiele said that the redesigning of the local currency would help to mop up the currency outside the banking sector, adding that out of about N3.3 trillion in circulation, close to N2.75 trillion were outside the banking sector.
Some commercial banks confirmed to The PUNCH that they received the new notes from the CBN a few of days ago, adding that the redesigned currency would be released to their customers effective Thursday.
“We got the funds (new notes) about two days ago. Our head office has dispatched the funds to various area offices across the country. My branch will pick up our allocation at a nearby area office. We will start releasing the new notes to our customers by Thursday”, according to a top official of a commercial bank.
However, some bank officials claimed the amount of the new notes was small.
According to them, most Over-the-Counter (OTC) payments would still be made using the old notes because the amount of the available new notes is small.
“The amount given to us is small compared to what we need. For example, what is available to my branch is less than N1 million. This is nothing compared to what we need. But I believe it will increase with time”, an official of FCMB in Lagos said.
Also, multiple banking sources said that they have started to reconfigure their ATMs to identify the new naira notes.
A top bank executive said: “Most of the banks have started reconfiguring their ATMs so that they can identify the new notes of N1000, N500 and N200″.
The House of Representatives has meanwhile scheduled a meeting with Emefiele on the new cash withdrawal policy, which restricts OTC payments for individuals and companies to N100,000 and N500,000 respectively.
In a memo introducing the policy, the CBN said that third-party cheques above N50,000 would no longer be eligible for OTC payment, while extant limits of N10 million on clearing cheques remains.
The circular also directed banks to load only N200 and lower denominations into their ATMs and restricted withdrawals from ATM to N20,000 per day. Withdrawals from PoS terminals were also limited to N20,000 daily.
The policy, which comes into effect on 9th January 2023, has generated criticisms but the CBN clarified last Wednesday that PoS operators could apply for a waiver.
For the Senate, the CBN should review the cash withdrawal limits policy.
On Wednesday, the upper legislative chamber also directed its Committee on Banking, Insurance and other Financial Institutions to embark on an aggressive oversight of the CBN.
In a report, the chairman of the committee, Senator Uba Sani (APC Kaduna Central) argued that the proposed cash withdrawal limits policy was well conceived by the CBN for the transformation of the nation’s economy, noting that the action falls within the mandate of the apex bank as provided for in Section 2(d) and 47 of its extant Act .
However, during the general debate on the report, many of the senators kicked against the timing of the policy stating that it could be particularly counter-productive.
Senator Ajibola Basiru (APC Osun Central), said that the proposed threshold of N100,000 and N500, 000 withdrawals per week for individuals and corporate bodies respectively was unrealistic.
He said: “Based on the report I got from my constituencies who are basically small traders, rural dwellers and people who may be negatively impacted by the policy, I think it is better to stick to fact, the threshold that has been set is totally unrealistic to have any robust and meaningful life for our people.
“Above N100,000 per week, you pay a processing fee of five per cent, looking at the inflation trend in our country and looking at the average cost of living and survival of every family in Nigeria, N20,000 daily withdrawal is going to terribly affect our people”.
Basiru, who described the recommendation of the committee as vague, said: “I am not oblivious of the fact that the committee had made recommendations on adjustments, but this is not enough. As a committee of the Senate, they ought to have interacted with the indices to come up with recommendations”.
Interrupting Ajibola, the Deputy Senate President, Senator Ovie Omo-Agege, who presided over the plenary, said: “That would mean that the Senate was interfering with the independence of the bank in line with Section 2 sub-section (47) that gave the CBN this power”.
Ajibola who still had the floor, in his response said: “If we cannot make suggestions on the threshold, then we have no business talking about this issue. I suggest that we increase the threshold to N100,000 daily and N500,000 weekly. This is realistic; the law is made for man and for the welfare of the people in our society.
“Why can’t we considerably adjust the withdrawal limits, that is vague, nebulous and adds nothing to the agitations of the Nigerian people who have elected us into the office”.
Also, Senator Adamu Aliero (PDP Kebbi Central) said: “This report gives us an ideal picture of what the economy should look like but in reality, it’s not the same. The informal sector of the economy in Nigeria is very big and it’s not captured in the banking system.
“Most people living in rural areas don’t go to the bank, they keep their money under their pillows and there is a need for sensitisation and enlightenment for the programme to fly. We have 774 local governments in this country; I can assure you that the banks barely have branches in 60 per cent of the places.
“I support the idea of e-banking but we should do it with caution. The CBN should considerably adjust the withdrawal limits in response to the public outcry; people are against this policy. If we give it about two to three years, people will embrace it”, he said.
Credit: The PUNCH