CBN In New Scheme To Flood Economy With Lower Denomination Notes

By Editor

Against the background of the absence of lower denomination notes in the Nigerian economy, the Central Bank of Nigeria (CBN) has initiated moves to address the situation through the banks.

The apex bank in a communique on Thursday said that it would use the Micro Finance Banks in a scheme to push through the lower denomination banks.

CBN director of corporate communications, Mr. Isaac Okorafor in a statement on Thursday said the Director, Currency Operations Department of the bank, Mrs Patricia Eleje, had issued a circular directed the MFBs to have a Composite Risk Rating (CRR) of above average in the most recent Risk Based Supervision (RBS) target examination before they can be integrated into the programme.

“The participating MFBs must be willing to accept a mixture of new and other banknotes, and that the MFBs shall give 20 per cent of any withdrawal in lower denomination notes subject to a maximum of N50,000.

“Where beneficiaries withdraw more than once in a day, the circular said that disbursement will only apply to one transaction per day.

“Similarly, the MFBs are allowed to exchange notes subject to a maximum of N50,000 for customers with bank accounts and N10,000 for customers without bank accounts.

“In that situation, the banks must not exchange for same beneficiaries more than once a week,” he added.

While warning that sanctions would be applied against saboteurs of the scheme, he said:

“The circular also warned MFBs against hawking, hoarding or using of funds obtained under the intervention for any other purpose.

“It also instructed the banks to put in place effective control measures that will ensure that banknotes disbursed to customers with or without accounts are not sold.

“Furthermore, the circular directed the banks to render weekly and monthly disbursement return to CBN branches where the intervention would be monitored periodically, and appropriate sanctions applied to erring MFBs.”

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