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• We’ve printed N400bn new notes, sanctioned erring banks –CBN
• Advises banks to strengthen e-banking platforms
• Banks, Nigerians hoarding available new currency –Sources
From Uche Usim, Abuja
When the Supreme Court in its March 3 ruling ordered the return of the junked N200, N500 and N1,000 notes into circulation and extended their lifespan till December 31, no one expected the new notes to vanish almost immediately.
Checks by Sunday Sun showed that cash disbursed across the counter at the various banks, the Automated Teller Machines (ATMs) and Point of Sale operators across the country, are the old and dirty notes.
Though the return of the old notes has ended weeks of economic hardship as the spending public now has enough naira for various transactions, there are fears that a ‘phase 2’ of the new naira scarcity horror will resurface after the December 31 sunset date for the old notes.
According to a top CBN official, N400 billion of the redesigned notes were printed, just as over N2 trillion old notes had been mopped up before the Supreme Court ruling.
While not declaring the specific amount that has been disbursed to the banks and in what sharing arrangement, the source insisted that bank customers were hoarding the new notes because of their earlier nightmarish experience during the naira scarcity period.
He revealed that the CBN had since sanctioned some commercial banks found hoarding the new naira notes.
He said: “The naira redesign policy has substantially achieved its objectives, which includes removing excess cash from circulation.
“Remember at the beginning of the naira redesign policy, the CBN discovered that out of N3.2 trillion in circulation, N2.7 trillion was outside the banks’ vaults.
“That was dangerous and had a lot of economic and national security implications.
“Today, a lot of that money has been mopped up. N400 billion of the new notes was printed. We can never have such a volume of naira notes in circulation again like we had before the naira redesign project. We encourage the use of various alternative electronic banking channels. That’s where the world is headed and we can’t afford to lag behind.”
On monitoring banks’ compliance as regards disbursing the new notes, he said: “We have 29 banks, 5,000 BDCs and other financial institutions (OFIS), so monitoring is not an easy endeavour. But we work in collaboration with some security agencies. We have constantly penalised some erring banks.
“The scarcity of the new notes you’re seeing is because Nigerians themselves are storing the new notes at home or wherever. They don’t want to spend them because they feel they don’t know when they will get another one. But these fears are unfounded. We’re going cashless. Banks are already improving their electronic banking channels. We have held several meetings with them on the need to invest more in ICT and reduce the downtimes.
“Many banks’ ICT staff left for overseas and it was part of what caused the glitches at the time. But banks are in competition. They now see an urgent need to upgrade their digital platforms. They’re deepening the use of technology because it’s less expensive and more efficient.
“On our part, we shall make enough cash needed to complement the electronic banking arrangement. There won’t be scarcity issues.
“Before the December 31 deadline, many banks and other players in the electronic banking ecosystem will have improved on their services and many more Nigerians would have embraced e-banking.”
Checks by Sunday Sun revealed that the currency in circulation in the country dipped by 235.03 per cent to N982.09 billion at the end of February; from N1.4 trillion in January 2023.
It was N3.29 trillion as at the end of October 2022, at the outset of the naira redesign policy.
Currency-In-Circulation (CIC) is the amount of money outside the vaults of the Central Bank; that is, all legal tender currency in the hands of the public and in the vaults of the Deposit Money Banks (DMBs).
However, data obtained from the CBN’s website revealed that the CIC grew by 71 per cent in one month to stand at N1.68 trillion as against N982.09 billion recorded in the previous month.
Reacting to the development, analysts noted that the figure recorded showed that the CBN left no stone unturned in its bid to improve the circulation of notes in the country after the hardship suffered by Nigerians due to the cash crunch in the first two months of 2023.
The banking public who spoke with Sunday Sun expressed shock as to how the new naira notes disappeared from circulation.
Mrs Clara Bartholomew, a civil servant, lamented: “Since the CBN asked us to go back to the old notes, the new notes are nowhere to be found. Everyone is asking where the money is. ATMs are not dispensing them. POS operators are also lamenting. The banks don’t have them. The customers don’t either. So, who has the new notes? I don’t have it. My office colleagues are asking this same question. It’s a disturbing development”.
Maryam Sanda, a fashion designer, also expressed worries over the scarcity of new naira notes.
“Are we having a foretaste of what is to come by December 31? Is the 2024 New Year celebration going to be celebrated in long queues at ATMs? I’m asking these questions because I’ve not touched new notes since early March. It’s old notes everywhere”, she stated.
Chinedu Joseph, a logistics enthusiast, urged the CBN to ensure that sufficient cash remained available in the economy.
“The new notes are and I hope we don’t have a repeat of the naira scarcity nightmare after December 31,” he said.
