The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) and authorized forex dealers, emphasizing the mandatory acceptance of old and lower denominations of United States Dollar (USD) bills from customers.
This directive comes in response to findings from consumer market intelligence, which revealed a continued pattern of selective rejection of these bills by financial institutions and forex dealers.
In a circular dated 27th June 2024, signed by Solaja Mohammed-J Olayemi, the Acting Director of the Currency Operations Department, and released on Monday on the bank’s website, the CBN reiterated the necessity for strict adherence to its earlier directive.
The new circular referenced an earlier directive, COD/DIR/INT/CIR/001/002, issued on 9th April 2021, explicitly prohibited the selective acceptance of deposits and required all relevant parties to comply fully.
The circular reads in part: “The outcome of the consumer market intelligence conducted by the Bank revealed the continued rejection of old/lower denominations of United States (US) Dollar bills by Deposit Money Banks (DMBS) and other authorized forex dealers.
“Kindly be reminded that the Central Bank of Nigeria (CBN) circular referenced COD/DIR/INT/CIR/001/002 and dated 9th April 2021 which explicitly frowned at this selective acceptance of deposit is still in force and must be adhered to and complied with by all relevant parties.”
CBN threatens to sanction non-compliance
Based on the earlier directive, all Deposit Money Banks and authorized forex dealers are now required to accept both old series and lower denominations of USD bills that are recognized as legal tender.
This directive aims to ensure customers can deposit these bills without facing unnecessary rejection.
The CBN has declared its readiness to impose sanctions on any DMB or authorized forex dealer found refusing to accept old series or lower denominations of USD bills from customers.
This measure is intended to enforce compliance and ensure uniformity in handling foreign currency deposits.
Prohibition on defacing dollar bills
In the circular, authorized forex dealers have been advised to cease the practice of defacing or stamping USD banknotes.
Such actions often result in these notes failing authentication tests during processing and sorting, causing further complications.
The circular concludes with a call for immediate compliance from all DMBs and authorized forex dealers.
What you should know
In 2021, the CBN ordered Deposit Money Banks (DMBs) and Bureau De Change (BDC) operators to accept from their customers, old and lower denominations of US dollars as legal tender or face sanctions.
This follows numerous complaints from members of the public on the rejection of old/lower denominations of the dollar by these banks and other authorized forex dealers.
