The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said that banks will continue to accept old naira notes even after the stipulated deadline for swapping with the newly redesigned naira notes.
In a move that looks like apparently bowing to the demand of the House of Representatives for a gradual phase-out of the old naira notes, Emefiele said that Nigerians won’t lose the old notes after the February 10 extended deadline.
This was made known by Emefiele when he appeared at an interactive session with the House of Representatives ad-hoc committee on the currency redesign and naira swap policy on Tuesday, January 31, 2023, in Abuja.
Emefiele said while the old notes cease to be legal tenders after the expiration of the deadline, Nigerians can still take them to the bank for exchange of new notes or deposit the old notes in their accounts.
CBN act allows the apex bank to continue to accept old notes
The CBN boss made reference to the CBN act which mandates the apex bank to continue to accept old notes after their expiration.
However, he did not mention the duration of when the banks will stop collecting the old notes.
- Section 20 (3) of the CBN act states: “Notwithstanding sub-sections (1) and (2) of this section, the bank shall have power, if directed to do so by the president and after giving reasonable notice on that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this sub-section, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this act, shall be redeemed by the bank upon demand.’’
- Speaking further on the CBN act, Emefiele explained that even after the old currency has lost its legal tender status “we (CBN) are mandated to collect this money (old notes) and I stand with the House of Representatives on this”.
According to him: “You will not lose your money even when it loses its legal tender. You can take it to the bank, and pay it into your account. But we should please allow this policy to succeed.”
- He said, “What does that mean? It could (old notes) have lost its legal tender status which means we have moved on. But if you have money that you have not been able to send to the bank, we will certainly give you the opportunity to bring them back into the CBN to redeem it. Either you pay it to your bank account or you want to do an exchange, we will give you. You will not lose your money. This is the assurance I give to Nigerians.’’
The CBN Governor who had earlier failed to honour the House’s invitations explained to the lawmakers that he was out of the country.
Speaking about the redesign of the naira, Emefiele said CBN’s actions were in line with international best practices and the apex bank has to be in control of the currency in circulation.
For catch up
- Recall that on October 26, 2022, the CBN announced plans to redesign the N200, N500, and N1,000 notes. Consequently, President Muhammadu Buhari on November 23, 2022, unveiled the redesigned naira notes at the State House in Abuja, with the apex bank fixing January 31, 2023, as the deadline for the validity of the old notes.
- However, there have been complaints from businesses and Nigerians over the availability of the redesigned naira notes with a call to the CBN to extend the deadline to avail more time for proper distribution.
- The House of Representatives had summoned the CBN governor and bank directors over the January 31, 2023 deadline for the validity of old N200, N500, and N1,000 notes but the bank chiefs refused to heed the invitation by the green chamber.
- The House further constituted an ad-hoc committee led by the Majority Leader of the House, Alhassan Ado Doguwa over the matter.
