The Central Bank of Nigeria (CBN) announce how to plans and take off naira notes that is already circulation and produce new ones.
But Governor of the apex bank Godwin Emefiele has make this announcement for one conference briefing on Wednesday 26 October.
According to Osita Nwanisobi speak on the statement for CBN send give EMMANUEL News, governor Emefiele has said that the management of the bank seek and obtain the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.
What makes CBN to produce new notes
Governor Emefiele has said that the CBN was facing a lot of problem with the management of the current series of banknotes that was circulation, especially the ones that was outside the banking system in Nigeria.
The currency management was the key function of the bank, that it was in Section 2 (b) of fhe CBN Act in 2007.
But they said this function was facing many challenges that wa increasing.
Godwin said one of the challenges was members of the public was uphoard banknotes. He also followed said that the statistics show over 80 percent of currency that was circulated in outside the vaults of commercial banks.
But another challenge was how dirty and unfit banknotes was for circulation and this one was given CBN bad image and it increase risk of financial instability.
The CBN also said that the currency that thy supposed circulation was increase risk of fake notes.
“In the recent years, the CBN has record significantly higher rates of counterfeit especially for the higher denomination of N500 and N1,000 banknotes,” Emefiele said.
Because, according to global best practice, central banks suppose to redesign, produce and circulate new currency every 5–8 years, but CBN hasn’t redesign the naira for over 20years now.
When was the new notes releasing ?
The CBN governor said that they have finalise arrangements for the new currency to begin circulation from December 15, 2022.
He also said that the new notes and the existing ones will remain legal tender and circulate together until January 31, 2023 when the existing notes will not be useful again.
“Accordingly, all Deposit Money Banks that they currently holding the existing denominations of the currency can start to return the notes back to the CBN effective immediately. So that the newly designed currency can be released to the banks in order of First-come-First-serve basis,” Emefiele Godwin said.
The CBN governor urge bank customers to begin pay the existing into their bank accounts so that they can withdraw the new banknotes once circulation start for mid-December 2022.
“All banks was expected to keep open, their currency processing centers from Monday to Saturday to accommodate all cash that we be returned by their customers,” Godwin said.
All Bank charges will be suspended
Governor Emefiele said for this reason any transition from existing to new notes, bank charges for cash deposits most be suspended with immediate effect.
“Therefore, DMBs this note that no bank customer will bear any charges for cash that they return or pay into their accounts,” that is what he said.
He informed all the members of the public that these existing notes will still being valid and they shouldn’t reject it as means of exchange for purchase of goods and services.
“We are using this opportunity to reassure the general public that the CBN will continue to monitor both the financial system in particular, and the economy in general, and always act in good faith for the achievement of the Bank’s objectives and betterment of the country,” Godwin CBN governor added.