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Direct sharing of new lower naira notes by CBN can’t varnish mutilated ones—Expert
…Already, CBN says N1.9b disbursed so far
A retired banker with one of the old generation banks Bode Mohammed, has argued that no matter how the Central Bank of Nigeria (CBN) tours the entire federation and disburse new lower domination notes, the challenge of dirty and mutilated notes will continue.
This is as the CBN has claimed that it has disbursed more than N1.9 billion various lower denomination banknotes to over 20 different merchants, supermarkets, toll gates, big eateries and other cash users. The apex bank who confirmed this development to newsmen in a release in Lagos weekend also disclosed that efforts were being made to penetrate the various markets in Lagos.
The move is to curtail the scarcity of lower naira denominations as a result of hoarding and sale by unscrupulous people, the bank said. The Acting Director, Currency Operations Department, Mrs. Precillia Eleje, had at a public sensitisation and enlightenment campaign on CBN direct intervention on lower denominations in Kurmi Market, Kano, recently expressed disgust at the activities of middle men who hoard, sell and buy such currencies at the detriment of the public.
However, responding to interview questions on current drive of the apex bank in resolving the scourge of rejectable lower notes across the country, Mohammed said “No matter how CBN goes around throwing lower notes around, the problem will continue because just as it is giving out new notes, taking back mutilated ones remains a tall order”.
“In banking all over the world, mutilated notes are sieved away from circulation through the commercial banks and we have been doing this thing like that for ages until the apex bank decided to jerk up the rate it charges commercial banks in returning dirty notes.
“Since the CBN increase what it used to charge commercial banks, the banks started rejection deposits of mutilated notes to avoid paying the increased cost of exchanging boxes of badly mutilated notes.
Mohammed further accused the apex bank of tilting its monetary regulatory interests to issues affecting only formal sector operators leaving the informal sector who form the key basis of the day to day running of every economy including Nigeria.
He averred that “Until the CBN seats one-on-one with the leadership of commercial banks and resolve the issue, mutilated notes will continue to hobble the economy because commercial banks have made up their minds in rejecting bad currencies”.