In the aftermath of the recent decision of the Central bank of Nigeria, CBN, to redesign the naira the apex bank has pegged the maximum naira deposit at N50 million per month. According to a new directive by the CBN, commercial banks in the country are not to accept more than N5 million for new account holders, and N50 million for old account holders per month.
The apex bank’s took the decision to redesign the national currency last week with the approval of President Muhammadu Buhari. Under the new regime, the Godwin Emefiele-led CBN said, N200, N500, and N1000 banknotes will be redesigned.
Emefiele cited criminality, the need to control inflation, reduction of the total cash in circulation as part of its reasons to do away with the old bank notes.
He said, “Indeed, the integrity of a local legal tender, the efficiency of its supply, and 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.
“More specifically, as at the end of September 2022, available data at the CBN indicate that N2.73tn out of the N3.23tn currency in circulation was outside the vaults of commercial banks across the country, and supposedly held by members of the public.
“Evidently, currency in circulation has more than doubled since 2015, rising from N1.46tn in December 2015 to N3.23tn as at September 2022. I must say that this is a very worrisome trend that cannot continue to be allowed.
“Also, in view of the prevailing level of the security situation in the country, the CBN is convinced that the incident of terrorism and kidnapping will be minimized as access to large volumes of money outside the banking used as the source of funds for ransom payment will begin to dry up.
But financial experts also insist that the CBN may have decided to redesign the old notes as a way of punishing those involved in massive hoarding of the currency, as well as to mop up counterfeit naira notes from circulation.
For instance, since the CBN announced the move last week cash deposit has spiked in all the commercial banks in the country. Pointedly, a huge chunk of the cash being deposited is old, dirty banknotes that have been minted as far back as 2007.
Some commercial banks have also extended their working days to Saturdays in order to be able to attend to huge cash depositors.
In spite of this, a bank worker in Victoria Island, Lagos Nigeria said “we are still struggling to meet up with the number of depositors”.
The CBN Director of Currency, Ahmed B. Umar who issued the directive said that individuals will not be allowed to deposit more than N5 million if the transaction involves a new account in one month, and if the transaction involves an old account, then only a maximum of N50 million will be allowed.
Umar warned that the Bank Verification Number, BVN, will be used to fish out depositors who may want to use multiple accounts to deposit huge cash.
Meanwhile, close watchers monitoring what is happening said innocent Nigerians may be caught up in the attempt by CBN to punish counterfeiters and criminals.
