CBN orders banks to stop over-the-counter withdrawal of new naira notes with immediate effect

The Central Bank of Nigeria (CBN) has directed Deposit Money Banks to halt the payment of new naira notes to customers making over-the-counter withdrawals immediately.

Instead, the apex bank directed that banks load their Automated Teller Machines (ATMs) with only new notes to ensure that the currency circulates across the country before the old notes become legal tender on January 31, 2023.

This could be related to the numerous reports of frustrations expressed by members of the general public who have been unable to obtain these new naira notes three weeks before the deadline.

According to a report from Punch, this directive is contained in a memo issued by the CBN to the banks on Wednesday, where it ordered that the implementation of this must commence immediately.

However, the report suggests that the banks are yet to comply with this directive as of Friday with complaints of inadequate supply of the new notes, prompting them to load their ATMs with the old notes.

According to the report, a source in one of the tier-1 banks who acknowledged the directive from the CBN stated that her bank 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.”

For the record

• Recall that on November 23, 2022, President Muhammadu Buhari unveiled the new naira notes of N200, N500 and N1,000 at the Council Chamber, Presidential Villa, Abuja, with their circulation commencing in December.
• However, due to the scarcity or inadequate supply of these new naira notes majority of Nigerians and many stakeholders have called on the CBN to extend the January 31 deadline as it will not be feasible for these new notes to adequately circulate around the country at that time.
• Investigations by Nairametrics showed that most of the ATMs of different banks visited at Ikeja, Ogudu and Ilupeju, as at Friday, were still dispensing only old and sometimes dirty N1,000 and N500 notes to customers, who lined up in a queue at the gallery.