Redesigned naira notes circulates today as banks reconfigure ATMs

The newly redesigned naira notes will go into circulation today, Thursday with Deposit Money Banks releasing the bills to their customers via over-the-counter payments.

This came about three weeks after the President, Major General Muhammadu Buhari (retd), unveiled the new bills at a weekly Federal Executive Council meeting in Aso Rock Villa.

The President unveiled the redesigned notes across the N200, N500, and N1,000 denominations.

The Governor, of the Central Bank of Nigeria, Godwin Emefiele, had in October announced that the apex bank would release re-designed naira notes by December 15, 2022.

He also disclosed that the old notes would cease to be regarded as legal tender by January 31, 2023.

Emefiele pointed out that the redesigning of the naira notes would help to curb counterfeit notes and reduce ransom payments to terrorists and kidnappers.

The CBN boss said it was worrisome that 85 per cent of the total currency in circulation was being hoarded by Nigerians.

As such, he said the redesigning of the local currency would help to mop up the currency outside the banking sector, adding that out of about N3.3tn in circulation, close to N2.75tn were outside the banking sector.

The CBN had, in a memo introducing the policy, said third-party cheques above N50,000 would no longer be eligible for OTC payment while extant limits of N10m on clearing cheques still remained.

The circular also directed banks to load only N200 and lower denominations into their ATMs and restrict withdrawals from ATMs to N20, 000 per day. Withdrawals from PoS terminals were also limited to N20,000 daily.

The policy, which will become effective on January 9, 2023, has generated criticisms but the CBN clarified last Wednesday that PoS operators could apply for a waiver.

Meanwhile, the Central Bank of Nigeria says it has retrieved more than N1 trillion since its launch of new naira notes in a bid to move cash back into the banking system.

Recall that CBN on November 26 unveiled new 200, 500, and 1000 naira bills ahead of a December 15 launch date. One of its reasons was the massive hoarding of banknotes with over 85 per cent of the currency in circulation outside the banks’ vaults.

“To be more specific, as, at the end of September 2022, available data at the CBN indicate that N2.73 Trillion out of the N3.23 trillion currency in circulation, was outside the vaults of commercial banks across the country; and supposedly held by the public,” Mr Emefiele said at the time.

“Evidently, currency in circulation has more than doubled since 2015; rising from N1.46 trillion in December 2015 to N3.23 trillion in September 2022. This is a worrisome trend that cannot be allowed to continue” he said at the time.

“We have taken more than a trillion and in the bank, we also have close to a trillion. But what we have done in the central bank is to move more people from different departments into currency processing so that they can process this cash as quickly as possible and from there, banks can now move what they have with them,” he said.