Confusion and frustration as Banks adjust to paying old naira notes

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Deposit Money Banks in Nigeria have started rationing the distribution of old N1,000, and N500 notes to their customers due to uncertainty over whether the Central Bank of Nigeria (CBN) will release the old notes in its custody.

This move comes after the CBN Governor, Godwin Emefiele, announced that the old N1,000, N500, and N200 notes were still legal tender.

However, despite the CBN’s statement, the Nigeria Labour Congress insisted on the seven-day ultimatum it gave the Federal Government to end the cash crunch.

The confusion over the legal status of the old currencies has been ongoing for several weeks amid a series of Supreme Court judgments in a suit between some state governments and the Federal Government.

Confusion, frustration, as Banks adjust to paying old naira notes
Nigeria Banks

The CBN’s declaration was expected to put an end to the scarcity of old and new naira notes that had affected Nigerians, but findings revealed that the naira crisis might not be over soon.

Investigations have shown that banks are rationing old notes to their customers via over-the-counter payments, with only a few lenders loading their Automated Teller Machines. Most banks in Lagos, Abuja, Ogun, Kwara, and other states were paying only N5,000 to each customer over the counters, while a few banks paid N10,000 only. Further findings indicate that only a few banks loaded their ATMs, and most of them were disbursing only N5,000.

Top bank executives revealed that most banks were paying what was left in their vaults, having sent a significant portion of old naira deposits to the CBN several weeks ago. Other officials said that lenders were also paying customers from little fresh deposits made by their customers.

Therefore, the rationing of old notes by Deposit Money Banks is likely to continue until the CBN releases more old naira notes into circulation.

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