Failure To Laod ATM Machine With New Banknotes Will Attract Penalty – CBN Warns Banks

The Central Bank of Nigeria (CBN) has give out warning that it will sanction banks that fail to comply with its directive to dispense the newly redesigned N200, N500 and N1,000 through their Automated Teller Machines (ATMs).

The warning was issued yesterday by the CBN Director, Currency Operations Department, Ahmed Umar, during a training session for state directors of the National Orientation Agency (NOA) in Abuja.

Also, in Lagos yesterday, the apex bank urged banks to comply with the directive to load their ATMs with the new notes to ensure that they circulate widely.

Umar explained that the purpose of the CBN directive was to implement the January 31 deadline for the withdrawal of old naira notes in circulation.

The apex bank had ordered banks to suspend dispensing the new currency notes over the counter, and to only make them available via ATMs.

Umar said: “We want to use this training session to pass a message that CBN has enough currency notes to go round the general public.

“We, CBN management, have mandated banks to stop putting old notes in their ATM machines. They should only put the new notes.

“And there is a serialisation of the policy that they can put either N500, N1,000 or N200 notes, whichever denomination they have or combination of any of those notes, they should just put new notes in their machines.”

He said: “We are going to monitor to ensure that the banks comply and if they don’t, we have a penalty for non-compliance.”

The CBN director further noted that in many countries across the world, it takes a few years to change a currency, adding that, “in our own case what we had was basically over 20 years of having the same design of note.

“Over that period, what it did to us was to create an avenue for some people to master the act of counterfeiting the note.

“In our own case, what we have is the minimum of 17 years or more for us to redesign our currency.

If you notice the N1,000 note that was introduced in 2005, it took 17 years for us to redesign it; N500 and N200 notes were also redesigned after 21 years and 22 years, respectively.

“So, if currency notes stay too long in the system, there is a tendency that people who counterfeit make a lot of efforts to produce the same notes. So, that is why there is a need to change our notes regularly,” he added.

Umar further pointed out that the N500 and N1,000  notes constituted 99 per cent of the currency notes being targeted by counterfeiters.

He said: “It is simple logic; the effort you put to counterfeit N1,000 is the same effort you put to counterfeit N5.

“So, why will they waste their energy doing small notes; they always target the higher note, particularly N1,000, because of the values attached to it,” he explained.

Also speaking, the Director General, NOA, Garba Abari, said the partnership with the CBN was geared towards educating the agency’s staff to assist in enlightening Nigerians on the naira redesign policy.

The central bank, in collaboration with the NOA and various market associations, yesterday commenced an aggressive enlightenment and public awareness campaign on the naira redesign project as well as the need to properly handle the naira notes. The initiative tagged, “Market Storm,” commenced in various markets in Gombe, Minna and Asaba, in the first phase, and will also hold in Kano, Ogun and Onitsha on Thursday. The exercise would be extended to other major cities across the country from next week.

“The essence is to continue to enlighten market people on why the naira redesign project was embarked upon, let Nigerians know that they should respect the naira and also encourage them to embrace alternative payment channels,” a central bank official had explained.

On October 26, 2022, the CBN Governor, Mr. Godwin Emefiele, disclosed the bank’s resolve to redesign, produce, and circulate new series of the N200, N500, and N1,000 denominations.

Emefiele had said the move would help to manage money supply, and tackle currency counterfeiting, and terrorism among others.

He had explained that while the circulation of the new banknotes would commence on December 15, 2022, the new and existing currencies shall remain legal tender and circulate together until January 31, 2023, when the existing currencies shall cease to be legal tender.

Emefiele had insisted that the January 31 deadline remained sacrosanct, adding that the 100 days provided for people to deposit existing banknotes in commercial banks was adequate.

President Muhammadu Buhari, had subsequently, on November 23, 2022, unveiled the redesigned banknotes during the weekly Federal Executive Council