CBN stops over-the-counter withdrawal of new naira notes

Deposit Money Banks are not supposed to reimburse consumers who withdraw new naira notes over the counter, according to a directive from the Central Bank of Nigeria.

To guarantee that the currency flows across the country prior to the deadline of January 32, 2023, when the old notes will no longer be accepted as legal tender, the central bank instead instructed the banks to load their Automated Teller Machines with exclusively new notes.

On Wednesday, the apex bank issued the directive to the banks and commanded that implementation start right once.

The banks protested that there wasn't enough of the new notes available, so they loaded their ATMs with the old ones as of Friday, failing to comply with the instruction. According to a Tier-1 bank source, her lender sent a note to all branch managers on Thursday directing them to enforce the CBN directive.

The memo, which was titled., ‘Urgent update on currency redesign’ and signed by the Group Head, Retail Operation, stated, “The CBN has mandated that we immediately stop the Over-the-Counter payment of the new N200, N500 & N,1000 currency. Instead, all new notes should be loaded into the ATMs for customer withdrawals.

“This is effective immediately please.”

However, the manager of one of the bank's branches in Ikeja, Lagos, who provided the information, complained that the new notes were hard to come by. As a result, the branch decided to stock the ATMs with a mix of old and new N1,000 and N500 notes for users to withdraw.

The source stated, “We got a memo from the head office this morning (Thursday) that we should stop dispensing new notes to customers who come to withdraw over the counter, but instead we should load the ATMs with the new notes. The correspondence from the head office said the directive was from the CBN and that we should implement it immediately.

The directive has, however, thrown us into a dilemma as we are in short supply of the new notes and we can’t afford not to load the ATMs as there has been a surge in the number of customers coming to withdraw after the Yuletide holidays.

“Loading of ATMs is the responsibility of the banks. When our bank tested the ATMs, only one denomination of the new notes passed the test of dispensing seamlessly through our machines. The bank is working on reconfiguring the ATMs to be able to dispense the new notes. What we have done in my branch is to mix the few new N1,000 and N500 notes available with old ones so that desperate customers can make withdrawals and meet their immediate needs.

“If you observed, a lot of ATMs were inactive during the Christmas and New Year holidays. The idea was not to give out old notes, but unfortunately, the new ones are not in circulation. The banks have a mandate to evacuate N1bn old notes each to the CBN on a daily basis and our head office has set a strict vault limit or cash holding limit for each branch, which on no condition we must exceed.”

Source