CBN POLICY: ALL YOU NEED TO KNOW ABOUT THE NEW POLICY

 

PRESS REMARKS BY GOVERNOR GODWIN EMEFIELE ON ISSUANCE OF NEW NAIRA BANKNOTES

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 that

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.

Godwin Emefelie

Governor 

Thank you for reading. Please share.