Good afternoon Ladies and Gentlemen, and welcome
to this special press briefing of the Bank. We have called this gathering to inform relevant stakeholders and the general public of persisting concerns we are facing with the management of our current series of banknotes, and currency in circulation, particularly those outside the banking system in Nigeria.
As you all may be aware, currency management is a
key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007. Indeed, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.
In recent times, however, currency management has
faced several daunting challenges that have continued to grow in scale and sophistication with attendant and
unintended consequences for the integrity of both the CBN and the country. These challenges primarily include:
▪ Significant hoarding of banknotes by members of
the public, with statistics showing that over 80
percent of currency in circulation are outside the
vaults of commercial banks;
▪ Worsening shortage of clean and fit banknotes
with attendant negative perception of the CBN
and increased risk to financial stability;
▪ Increasing ease and risk of counterfeiting
evidenced by several security reports.
Indeed, recent development in photographic
technology and advancements in printing devices have
made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.
Although global best practice is for central banks to
redesign, produce and circulate new local legal tender
every 5–8 years, the Naira has not been redesigned in the last 20 years.
On the basis of these trends, problems, and facts,
and in line with Sections 19, Subsections a and b of the
CBN Act 2007, the Management of the CBN sought and
obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.
In line with this approval, we have finalized
arrangements for the new currency to begin circulation
from December 15, 2022. The new and existing
currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.
Accordingly, all Deposit Money Banks currently
holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately. The newly designed currency will be released to the banks in the order of First-come-Firstserve basis.
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 tha 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.
We would like to use this opportunity to reassure the
general public that the CBN would 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 the betterment of the country.
I thank you for listening.
