Naira Redesign: CBN May Increase Money Supply to Boost Availability of New Banknotes

Naira Redesign: CBN May Increase Money Supply to Boost Availability of New Banknotes

*Vows to punish any bank found hoarding currency 

*Intensifies awareness to traditional, religious institutions 

James Emejo in Abuja and Onuminya Innocent in Sokoto

The Central Bank of Nigeria (CBN) yesterday said it would take appropriate measures where necessary to increase money supply in order to boost the availability of the redesigned naira notes nationwide.
The CBN Director/Managing Director, NIRSAL Microfinance Bank, Mr. Abubakar Abdullahi Kure, disclosed this while conducting on-the-spot checks on some banks to ascertain their level of compliance with the recent apex bank’s directive to dispense the newly redesigned banknotes via ATMs.

He noted that the essence of the nationwide monitoring exercise was to evaluate the situation on the ground as well as take necessary actions following public outcry that the new banknotes were scarce and unavailable even through the ATMs.
He said, “The monitoring exercise will end by Saturday when we hope to have enough feedback even if it means tinkering with our policies so that the new naira notes can be everywhere, we will do that.”

Asked to clarify the specific measures that could be adopted, he said, “Tinkering means whether there will be a need to increase supply or the monitoring evaluation may show that there is a diversion for penalties or whether the banks are hoarding the banknotes deliberately or whether the banks are not even picking it; it could be available and the bank may not be picking it – there could be many issues. So, this monitoring exercise will reveal many things.”

However, the enforcement team led by Kure, visited two different banks and found out that only one out of their four ATMs was dispensing the new naira notes while others were still dispensing the old currency notes.
On further enquiries into why they were in breach of the CBN’s directive, the bank managers separately told the monitoring team that they had not received the new naira stock.

Disappointed, Kure said the CBN would take inventory of the money they had collected from the CBN in order to verify their claims, adding that any diversion or hoarding of the new banknotes by the banks would be penalised.

He said, “Any bank that diverts – collected the money and is not feeding into ATM or is allowing for withdrawal of new banknotes across over the counter – definitely, the CBN will look into it and declare appropriate penalties.”
The monitoring and evaluation exercise of central bank assurance is coming 10 days before the January 31, 2023 deadline it issued for the return of the old banknotes, after which they cease to be legal tender.

Addressing journalists at the end of the exercise, the CBN director said, “The summary is that the new notes are out but either the banks are not picking them from the CBN or the monitoring mechanism will reveal what is happening –whether there is the diversion of the new naira notes to other uses, we don’t know but basically, what we’ve seen is that some ATMs are dispensing new notes, whereas others are dispensing the old notes.
“So, those that are dispensing old notes, we would check our records and see what stock they have gotten from the central bank and how they have utilised it. And where there are diversions, we are going to penalise them.
“Above all, this exercise is useful because it would put banks on their toes to know at least, that there is a monitoring mechanism now for them to disburse the new notes.

“And those who do not do what is expected, of course, the CBN has the authority and powers to mete out appropriate penalties.”
Some of the bank customers interviewed expressed their frustration over the inability to access the new naira notes via ATMs.
A POS operator told THISDAY that she had been unable to access the redesigned banknotes adding that her customers were beginning to reject the old naira notes.
Earlier, as part of the activities of the central bank to drive awareness and sensitise the public on the newly redesigned banknotes, Kure also led the team to traditional and religious institutions within the Federal Capital Territory (FCT).
Kure, alongside other CBN officials, visited the Ona of Abaji/Chairman of the FCT Council of Traditional Rulers, His Royal Majesty, Alhaji Adamu Baba Yunusa, at his palace in Abaji.

Stressing that the January 31 deadline for the return of old naira notes remained sacrosanct, the CBN director urged the people to make hay while the sun shines by depositing the old notes in banks – in order not to incur losses at the expiration of the timeline.
Among other things, he explained that the currency redesign project was meant to address inflation, control money supply, and reduce the cost of currency management as well as tame terrorism.

Kure added that traditional institutions remained critical in the sensitisation of the public, particularly rural dwellers on the naira redesign programme.
He also assured the traditional ruler that the people can always use their money at will even after exchanging them for the new banknotes, adding that the CBN had established a robust payment infrastructure for people to use in their financial transactions – stressing that there are agency- banking operatives and POS terminals in every nook and cranny of the country.

Responding however, the monarch commended the federal government for deeming it fit to redesign the naira at a crucial time in the country’s history, as well as praised the CBN for embarking on the awareness exercise.
The royal father also urged the opportunity to urge the central bank to review the January 31 deadline upwards noting that “up till now, some of my people haven’t seen the new naira”.

While also assuring of the support of the traditional institution towards the betterment of the country, Yunusa made a passionate appeal to the CBN to consider citizens of the FCT for employment at the apex bank.
The CBN team also took its awareness campaign to the International Centre for Islamic Culture and Education (ICICE), Abuja, where it was received by its Director General, Dr. Kabir Kabo Usman.

Kure stressed that the objective of the visit was to ensure that religious institutions help to spread awareness of the new naira to the grassroots.
Usman, while pledging support to the CBN team said the rural dwellers needed to act fast by depositing their old banknotes in order to save their investments.
He said the currency redesign programme was a positive step towards developing the Nigerian economy.

He said, “What we can only do is to encourage the local businesses in rural areas, in local governments to make sure that they go to the banks and deposit all their old notes because, after January 31, there are going to be obsolete.
“It is our responsibility to make sure that happens so that we don’t go and create insecurity, more inflation in the process of trying to achieve stability of our economy.”

“We will do our best to inform our followers and let them know that there is a positive thing that is coming out of this…”
Meanwhile, the Sultan of Sokoto, Muhammadu Sa’ad Abubakar has advised the CBN to reconsider the January, 31st deadline for the old notes to remain in circulation in the country.

Speaking while receiving the CBN Comptroller in charge of Sokoto State, Dahiru Usman, who led some officers of the Apex bank to intimate him and seek his advice on the redesigned naira notes at his palace, yesterday, the monarch observed that, many people were still unaware of the redesigned naira notes, especially at the rural areas.
“We still have people who didn’t know that our naira was redesigned. They could reject the new naira notes when given. If they see the colours they will think is a fake currency.

” The CBN ought to have considered stakeholders right from the day the resignation was announced.
“We have credible means to step down the information to the common man because the conventional media is for the elites.
“You should have used traditional rulers to pass the message down to the masses but you didn’t involve us, that is why we keep quite.”
Sultan Sa’ad identified insecurity as another challenge as some people could note move large sum of money from their village to banks in the city because they could be robbed or kidnapped along the way.

He then asked “what will be the fate of these people after January, 31st deadline.”
Earlier, the branch controller said they were in the palace to inform the Sultan about the naira redesign project.
The apex bank visited some banks to monitor their compliance with the CBN directive of dispensing redesigned notes to customers through their ATMs, just as they sensitised traders on the need to deposit their money in banks and adopt e-Naira transaction.

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