E-Financial
Confusion over Legal Status of Naira Notes as CBN and Bankers Bicker
Despite the affirmation by Central Bank of Nigeria (CBN) that both old and new notes are still legal tender, an unnamed banker has warmed that customers who are accepting old N1000 and N500 notes from their banks are doing so on their own.
The banker claimed that customers would not be able to deposit the same old notes in banks at the moment until the Central Bank of Nigeria orders commercial banks to start paying and receiving the old notes.
But Dr Isa Abdulmumin, acting director of Corporate Communications, CBN, said that “Banks are paying old notes as well as new notes. They are all legal tender.
Yes, the CBN has not issued an official statement on the issue. Anyone banks give to you, you can collect. We just want to make life easy for Nigerians.”
However, a bank official, who does not want to be named, claimed that some banks paid the old naira notes on Monday and Tuesday.
However, he said some stopped the payment when they noticed it may trigger another crisis as it was not yet authorised by the CBN.
While some paid through the Automated Teller Machines (ATM), other banks paid the old notes over the counter to customers.
The bank official said that banks will not allow any deposit in the old notes unless the CBN gives further directives, saying those who had generated CBN codes to make deposits earlier would no longer be allowed to make another deposit.
“CBN hasn’t given any directive yet. But commercial banks are partially paying the old notes to customers. Though it is not compulsory for customers to collect the old notes as banks won’t take them back from customers for now.
“As I speak with you, we are still on a one-off deposit once you generate the code from the CBN. So, imagine how they will deposit the cash if they’ve already deposited before,” the bank official said.
On why commercial banks decided to pay the old notes when they know the CBN has not given the order to do so, the source explained that banks are aware of the lack of cash in the economy, saying most of the officials are not happy seeing their customers under the sun and in the rain waiting for new notes that are not available.
The banker stated that banks decided to pay to ease the issue of people not having cash, adding that “the CBN remains adamant to change the new policy.”
Elsewhere, Nigerians are appealing to President Muhammadu Buhari to obey the order of the Supreme Court to allow the old notes to co-exist with the new ones.
However, some have predicted that the President would not act on the order of the court until after the March 11 governorship election so as to prevent candidates from buying votes with the old notes some of them have already stashed in their coffers.
Nigeria Deposit Insurance Corporation (NDIC) has said that it has obtained Winding up Orders for 96 out of 183 microfinance and primary mortgage banks whose licenses were revoked by the Central Bank of Nigeria (CBN) in May 2023.
Bello Hassa, managing director, NDIC, stated this at a sensitisation seminar for Judges of the Federal High Court in Lagos organised by the NDIC, to enlighten the judiciary on the intricacies of the banking industry.
Hassan said, “As at date, the Corporation had obtained Winding up Orders for 96 out of 183 Micro Finance and Primary Mortgage Banks whose licenses were revoked by the CBN in May 2023, in less than one Year of revocation.”
He added that the NDIC was committed to fulfilling its mandate of protecting depositors through bank supervision, failure resolution and liquidation so as to boost confidence in the financial system.
Speaking on the role that the judiciary plays in the fulfillment of the mandate, Hassan said, “We recognise the judiciary as one of our critical stakeholders. With this, when cases are brought before them, they can receive accelerated hearing and proclamation of Justice.”
Citing some of the achievements from previous editions of the seminar, Hassan said that instances where liquidation-related litigations experienced delays were reduced.
Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing financial institutions to implement the national 0.5 per cent cyber security levy after the policy was largely resisted.
The withdrawal of the circular was announced via a statement signed by Haruna Mustafa, director, Financial Policy and Regulation, Department and Chibuzo Efobi, director, Payment System Management Department.
The apex bank confirmed the suspension in a circular issued on May 17, 2024 with reference number PSMD/DIR/PUB/LAB/017/005 addressed to commercial banks, mobile money operators, and other financial institutions.
In an earlier circular issued on May 6, 2024 with reference PSMD/DIR/PUB/LAB/017/004, the bank mandated financial institutions to charge a 0.5 per cent levy on all electronic transactions.
President Bola Tinubu last week ordered the suspension of the National Cybersecurity levy.
The Association of Bureau De Change Operators of Nigeria (ABCON) has called for the Securities and Exchange Commission (SEC) guidance and collaboration in harmonising the peer-to-peer forex sector in the country.
At an official courtesy visit to the newly appointed SEC Director-General, Dr. Timi Agama, the President of Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, who congratulated the SEC D-G on his appointment, observed that SEC regulates the sector that continues to threaten the existence of BDCs in Nigeria through online virtual transactions platforms which give access to millions of Nigerians to trade in foreign exchange without trace and accountability.
He also explained that ABCON has invested in requisite technology to ensure the continued existence of the business and the preservation of the integrity of the sub-sector, stressing that the future of BDC’s business was digital currency. The ABCON boss said that the meeting with the SEC DG and his executive board was a follow up to an earlier online virtual consultation.
Gwadabe explained that ABCON, the umbrella body for all licensed retail foreign exchange dealers, was established in 1991 to liaise with regulators, relevant stakeholders and security agencies for a transparent retail end forex market.
Gwadabe said: “As at today, there are over 34 million Nigerians dealing in digital currency and the number is rising by about nine percent with a huge market of $9 billion annually. There are thousands of multichannel virtual currency FX platforms and none is indigenous to Nigeria, adding that P2P represents individual-to-individual transaction.
“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities Exchange Board in building the platform knowing that they have sources of foreign exchange. ABCON is willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.
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