CBN Issues Stern Warning to Banks Over Rejection of Mutilated Naira Notes
The Central Bank of Nigeria (CBN) has strongly cautioned Deposit Money Banks (DMBs) against the refusal of dirty or mutilated Naira notes. This directive comes in response to numerous complaints received by the CBN, highlighting instances where banks have declined to accept damaged currency from the public.
In a circular dated June 28, 2024, signed by Solaja Olayemi, the acting director of the currency operations department, the CBN reiterated the enforcement of guidelines initially set out in a previous circular from July 2, 2019. These guidelines specify penalties for banks that reject Naira banknotes, underscoring the importance of compliance.
“The Central Bank of Nigeria shall not hesitate to apply strict sanctions on DMBs who are reported to have rejected deposits of Naira banknotes from the public, under any guise,” the circular stated emphatically.
The issue of mutilated banknotes has been a long-standing concern in Nigeria, as the CBN strives to ensure that currency is handled with care by the public.
READ ALSO:
Federal Government Aims for $1 Trillion Economy with New Financial Inclusion Framework
The legal framework for this directive is grounded in Section 21 of the CBN Act, which explicitly prohibits the abuse of Naira notes and prescribes penalties for offenders.
According to Section 21 (1) – (3) of the CBN Act, anyone who tampers with a coin or note issued by the Bank is guilty of an offence and, upon conviction, is liable to imprisonment for a term not less than six months, a fine not less than N50,000, or both.
A coin or note is considered tampered with if it has been impaired, diminished, or lightened by means other than fair wear and tear, or if it has been defaced through actions such as stamping, engraving, mutilating, piercing, stapling, writing, tearing, soiling, squeezing, or any other form of deliberate and willful abuse.
Even acts such as spraying, dancing on, or stepping on the Naira during social occasions are deemed to be abuses and defacements punishable under Sub-section (1) of this section.
In recent times, the Economic and Financial Crimes Commission (EFCC) has stepped up its enforcement of the CBN Act, leading to the arrest and prosecution of individuals suspected of mishandling the Naira.
High-profile arrests have included Nollywood actress Oluwadarasimi Omoseyin, popular crossdresser Bobrisky, and socialite Cubana Chief Priest, underscoring the seriousness with which these regulations are being enforced.
The CBN’s ongoing efforts aim to maintain the integrity and usability of the Naira, ensuring that all notes in circulation remain in good condition and that banks uphold their responsibilities in accepting and processing all Naira notes, regardless of their condition.