The Central Bank of Nigeria has ordered Deposit Money Banks not to pay customers making over-the-counter withdrawals of new naira notes again.
Instead, the apex bank directed the banks to load their Automated Teller Machines with only new notes to ensure that the currency circulates across the nation ahead of the January 31, 2023 deadline when the old notes will no longer be legal tender.
The PUNCH gathered that the apex bank issued the directive to the banks on Wednesday and ordered that the implementation must begin immediately.
However, as of Friday, the banks had not been able to comply with the directive as they complained of inadequate supply of the new notes, prompting them to load their ATMs with the old notes.
A source in a Tier-1 bank, who informed one of our correspondents of the CBN directive on Thursday, said her lender on Thursday issued a memo in that respect to all the branch managers to enforce the CBN order.
The memo, which was titled., ‘Urgent update on currency redesign’ and signed by the Group Head, Retail Operation, stated, “The CBN has mandated that we immediately stop the Over-the-Counter payment of the new N200, N500 & N,1000 currency. Instead, all new notes should be loaded into the ATMs for customer withdrawals.
“This is effective immediately please.”
The source, who is a manager in one of the bank’s branches in Ikeja, Lagos, however, complained that the new notes were in short supply, hence the branch decided to load a mixture of the old and new N1,000 and N500 notes in the ATMs for customers to withdraw.
The source stated, “We got a memo from the head office this morning (Thursday) that we should stop dispensing new notes to customers who come to withdraw over the counter, but instead we should load the ATMs with the new notes. The correspondence from the head office said the directive was from the CBN and that we should implement it immediately.
“The directive has, however, thrown us into a dilemma as we are in short supply of the new notes and we can’t afford not to load the ATMs as there has been a surge in the number of customers coming to withdraw after the Yuletide holidays.
“Loading of ATMs is the responsibility of the banks. When our bank tested the ATMs, only one denomination of the new notes passed the test of dispensing seamlessly through our machines. The bank is working on reconfiguring the ATMs to be able to dispense the new notes. What we have done in my branch is to mix the few new N1,000 and N500 notes available with old ones so that desperate customers can make withdrawals and meet their immediate needs.
“If you observed, a lot of ATMs were inactive during the Christmas and New Year holidays. The idea was not to give out old notes, but unfortunately, the new ones are not in circulation. The banks have a mandate to evacuate N1bn old notes each to the CBN on a daily basis and our head office has set a strict vault limit or cash holding limit for each branch, which on no condition we must exceed.”
When contacted, the CBN spokesman, Osita Nwanisobi, did not respond to enquiries by The PUNCH. As soon as one of our correspondents introduced himself and the topic, he went mute. Subsequent calls to his mobile line were not taken. Text and WhatsApp messages sent to his telephone were not replied to.
However, a senior official of the CBN, who spoke on condition of anonymity because he was not authorised to comment on the issue, confirmed to The PUNCH that the apex bank indeed issued the directive to the banks.
He explained, “From this weekend, new notes will be available for disbursement to bank customers. We are pushing the N1,000 and N500 notes through the ATMs for now. The N200 will be available later.
“The aim is to check inflation and currency abuse. A research was conducted and it showed that the demand for the N1,000 and N500 is higher, hence the decision to start with them.”
When asked when the agent banking representatives, who dispense cash to customers through Point of Sale terminals, would have the new notes, he said the objective of setting them up was not to handle large volume transactions, adding that the operators were abusing the guideline.
A source in the corporate affairs department of a new generation bank told The PUNCH, “Even before the CBN directive, our bank had been loading the ATMs with new notes. However, I must admit that the new notes are in short supply. What we do is to mix them up with old notes. For example, if you want to withdraw N10,000, you may get only two pieces of new N1,000. Some of our ATMs in the Oniru area of Victoria Island, Lagos, are dispensing only new notes.
“The configuration of the ATMs is an ongoing thing; yes, all the ATMs have not been fully configured. There are gaps from the regulator, which is the CBN, but we will obey the directive within the limit of what we have. Customers are depositing old notes in huge volumes. The CBN has stopped the supply of the notes that will soon cease to be legal tenders to the banks.
“I am sure that before January 31, the new notes would have spread to different parts of the country. Though I work in a bank, I have not seen the new N200; I have only seen N500 at a party in Abeokuta and it was being sold as your paper rightly reported a few weeks back.”
When Saturday PUNCH conducted surveys across many bank branches and ATM galleries on Friday to find out if the CBN directive had been complied with, it was discovered that the majority of them were still dispensing to their customers old notes that would go out of circulation by month end.
At the Ibafo, Ogun State branch of the UBA, it was observed that the ATMs were dispensing only old N1,000 and N500 notes to customers, who lined up in a queue at the gallery. When one of our correspondents asked the security guard on duty at the gallery when new notes would be loaded onto the ATMs, he said arrangements were being made for that and that the new notes should be available two hours from then. That was around 12.15pm. A subsequent visit to the bank’s ATM gallery around 2.30pm revealed that one of the machines had been loaded with the new N1,000 notes, but customers were limited to withdraw only N10,000.
At the nearby Access Bank branch, only one ATM was working at the gallery as it only dispensed the old N1,000 notes.
At the UBA Akute business office in Ogun State, one of our correspondents observed that the ATMs were dispensing new notes, but old notes were being paid to customers who made over-the-counter withdrawals.
The First Bank ATMs in Mowe were dispensing old notes as of Friday afternoon and when one of our correspondents approached the cashier inside the banking hall for new notes, she was told that it was not possible as the branch only got small amounts of the new notes and was mixing it with old notes.
Over the counter, customers were being given old notes, but the cashier said the new notes should be in circulation by the end of the month. When our correspondent returned to the ATM gallery, she withdrew N5,000 in old N500 notes.
PoS operators in Magboro said that they did not have new notes to give to their customers, adding that in a bale of N100,000 they get from the bank, they get only N1,000 new notes.
At the Ecobank branch inside the Mountain of Fire and Miracles’ Prayer City, Magboro, Ogun State, the ATMs were not dispensing new notes and customers were also being paid old notes over the counter. A teller said the branch did not have new notes to dispense to customers.
The Access Bank and Wema Bank ATMs in Arepo were also dispensing old notes.
At the GTbank, Mushin, Lagos, the ATMs were still dispensing old notes, while over-the-counter withdrawals were also in old notes. The same situation was recorded at the bank’s branch in Anthony Village.
Branches of Access Bank and First Bank at Nyanya in Abuja were still dispensing old notes as of 2pm on Friday.
At Access Bank, CMD Road, Magodo, Lagos, the old naira notes were being dispensed by the ATMs and inside the banking halls.
It was observed that some customers, who insisted on new notes, were told to return on Monday or wait till the bullion van bringing the notes from the ‘store’ arrives later on Friday evening.
An aggrieved customer, Ayotunde Disu, who claimed to have been affected by the situation, said he had been lied to by the tellers for far too long.
Disu said, “I am a PoS operator. They know me here. They promised to give us some level of concession but they have been posting me. I came here on December 30, 2022, and they promised that they would attend to me on January 4, 2023, when they resumed.
“I came here on January 4 and I was shocked when they gave me very dirty notes. I rejected them and protested, and they told me to come back today (Friday). Look at it now. They are telling me to hold on till Monday. I won’t.
“My own problem is that I don’t want to have any old notes with me by the time the deadline is over, which is January 31, 2023.”
Another customer at the banking hall, who did not want to be named, said he was shocked when the teller gave him old notes when he came to cash a cheque.
“I don’t bank here but I came to cash a cheque. They are giving me old notes, which are very dirty. They look like they were taken out of a dungeon. Of course, I rejected them,” he said.
A teller at the counter said the new notes had been exhausted.
“They gave us some new notes as we resumed this year, but I have to be honest with you; they have finished. I cannot have the new notes and do not want to give you, please,” she said.
Another teller, who begged not to be named, asked our correspondent to come back on Monday, promising to give him the new notes.
“I am not promising that everything will be new notes, but I will try and squeeze out more than the approved 10 per cent per N100,000 for you,” he said.
At the Keystone Bank branch on CMD Road, the situation was even worse as no new note was disbursed over the counter. The tellers claimed to have all exhausted the ones given to them for the week.
“They gave us some stacks as we resumed this year, but we have exhausted them. This morning, I still had some, but a PoS operator came and took everything,” one of the tellers claimed.
A customer in the banking hall, Hadiza Ahmed, said he had not laid her hands on the new notes since they were released last year.
“I don’t know if this January 31 deadline is feasible because I haven’t even touched the new naira notes since they were released,” she added.
At Access Bank, Obalende, the tellers mixed the new naira notes with very old and dirty old notes for customers.
One of our correspondents observed that for N50,000 withdrawal, N5,000 worth of new notes were added. For N100,000, N10,000 was given.
Many customers who were disgruntled by this and protested to have their notes changed were asked to come back on Monday.
“The tellers said we should come back on Monday. My own fear is that I don’t want to collect these old notes and forget to spend them and they become invalid in my hands,” a customer stated.
At the First Bank main branch on Bonny Island, Rivers State, old notes were still being dispensed as of Friday.
A trader, Comfort Adindu, who visited the branch for an over-the-counter withdrawal, was paid with old notes.
Adindu said, “At Bonny Island, I am not sure these new notes have been brought except for those who brought them from Port Harcourt.
“I have gone to many banks and they are still giving out old notes.”
A student, Wisdom Ahamefuna, who visited the UBA, King Perekule Road branch, Bonny, said the tellers mixed a few new notes with the old notes at the counter.
“The ATMs are still dispensing old notes. It is as though the money has been kept for long,” he added.
A senior bank official at Access Bank, who begged for anonymity because he was not permitted to speak on the matter, said it was not the fault of the banks but that of the CBN.
The bank official said, “The new notes you are talking about are being given by the CBN and the quantity they give to us is too small; so, we have to ration them to all over customers. There is nothing we can do.
“It is obvious that the January 31 deadline is not feasible, but we are waiting for the decision of the CBN. A lot of our customers are complaining. One even came here to fight us, but there is nothing we can do.
“Last week, our director of currency operations came with just 14 stacks worth N100,000 of new notes. How many customers will that serve?”
READ ALSO: Banks Run Out Of New Naira, Demand Soars
CBN overwhelmed – Economist
An economist, Mr Ade Dayo, said the central bank seemed overwhelmed as it was obvious that it would not be able to meet up with the January 31 deadline.
Dayo stated, “The CBN policy is good but the time span is too short. By this time, the new notes should have been everywhere. The CBN needs to do more sensitisation. It doesn’t seem like many people are aware that there is even a new naira or what it looks like, and it is not a good one.
“If people in Lagos and other megacities like Port Harcourt are having issues with getting the new notes, what will then happen to rural dwellers, who do not even have access to banking? The CBN must resolve this issue of moving the deadline a bit further to enable Nigerians to get the notes.”
Nigerians Need Cash Now, Osinbajo Laments Naira Scarcity
Vice President Yemi Osinbajo, SAN, has expressed concern over difficulty experienced by Nigerians in getting the new naira notes.
The VP on Friday in Abuja met with some players in the FinTech space to explore possible ways of mitigating the hardship.
Osinbajo urged the Central Bank of Nigeria (CBN) and banks to deploy more FinTechs and money agents to the hinterlands to address the worrying situation.
The Vice President stated that Nigerians need cash to pay for transport, food, and other needs.
“In Abuja how do you take ‘drop or along’ or use a Keke NAPEP without cash, or buy foodstuff on the road or in canteens, or even buy recharge cards?
“Parents with kids in public schools give money daily to their children for lunch, most commerce is informal, so you need cash for most things”, he said.
Osinbajo said it was disturbing that after depositing old notes, there are no new notes: “People everywhere in the urban areas and rural areas simply have no money.”
The nation’s second-in-command observed some FinTechs have mobile money licenses and should be engaged immediately.
He said many of them have micro-finance bank licenses and already have a network of mobile money agents or human banks or human ATMs, as they are sometimes.
“They can supervise by themselves. They can do currency swaps and open bank accounts.”
Also on Friday, President Muhammadu Buhari met with some All Progressives Congress (APC) governors at the Presidential Villa over the nara scarcity.
Nigeria’s External Reserves Fell By $63.62m In January
External reserves fell by $63.62 million in January, latest figures from the Central Bank of Nigeria, CBN, have revealed.
The CBN revealed in its data on the movement of foreign reserves that the external reserves, which ended December 30, 2022, at $37.08 billion, fell to $37.01 billion at the end of January 30, 2023.
Nigeria’s external reserves fell by $3.43 billion in 2022 after dropping from $40.52 billion at the end of December 31, 2021.
Earlier, Cordros Securities, in its January report, stated that the country, through its policy, has continued to sideline foreign investors at the expense of foreign earnings.
“CBN’s FX supply to the foreign exchange market segments remained significantly below before the COVUD-19 pandemic period. Meanwhile, the demand for the greenback has increased as market players continue to source for FX to fulfil and clear their outstanding obligations,” the report said.
Emefiele’s Cashless Policy Disastrous – Shehu Sani
Civil rights activist and former Senator representing Kaduna Senatorial District, Shehu Sani has described the cashless policy introduced by the Central Bank of Nigeria, CBN, governor, Godwin Emefiele as disastrous and poisonous.
Sani was reacting amid hardship being experienced in withdrawal of money by bank customers leading to queues across the country.
In a statement he issued on Friday and sent to DAILY POST, Sani wondered how public policy should be a catastrophe to people rather than being a succour.
He said: “The redesigning of the National currency and the cash withdrawal policy introduced by Godwin Emefiele is an economic disaster and a poisonous idea aimed at unleashing hardships on the masses of Nigerians.
“If the Buhari administration really wants to target the few corrupt, it doesn’t have to wait this long and it doesn’t have to impoverished punish the poor. Emefiele set a forest on fire in the name of catching a few rats.”
The ex-lawmaker posited that the apex bank has become a political institution, stating that as a developing nation, economic policies such as this would have taken the status of Nigerians into cognisance.
“The CBN has become a political institution and a home for serpentine and delirious economic ideas.
“The CBN under Emefiele has become a shrine for misery and a breeding ground for penury. It has become a republic within a republic,” he said.
He queried reasons Buhari allowed the policy at the twilight of his administration, particularly in 2019 when he recontested to stop vote buying.
“Why didn’t the Buhari administration introduce the change of currency in 2019 and waited until 2023 if the CBN policy is about curbing vote buying?
READ ALSO: JUST IN: Buhari Meets APC Governors At Villa
“Nigeria has been turned into a vast refugee camp where people queue for cash ration. Nigerians have subjected to the multiple tragedies of struggling for money, searching for money, looking for money and scratching for money.
“Nigerians used to buy Dollars at the black market, now they are also buying Naira at the black market.
“The Ahmed Lawan led Senate has failed to checkmate the excesses and autocracy of the CBN because the leadership is in bed with it. The House of Reps have a clear and principled position on the matter”, he concluded.
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