To ensure that Nigeria’s banknotes in circulation are clean and of high quality, the Central Bank of Nigeria has issued a clean note policy.
The clean note policy which entails a spectrum of diverse currency management activities geared towards the efficient circulation of premium quality banknotes will also lead to the withdrawal of unfit or soiled banknotes “to guarantee public confidence and usage of the naira banknotes as a medium of exchange”. officials of the apex bank disclosed.
Abuja Business Reports gathered that about N7.9 trillion pieces of naira notes in circulation in the country are dirty, mutilated and unfit for Automated Teller Machines (ATMs) and over-the-counter payments.
Confirming the development, a statement by CBN’s Deputy Governor, Operations Folashodun Shonubi and Director, Currency Operations Department Mrs. Pricilla Eleje revealed plans by the CBN to withdraw such notes from circulation.
The officials noted that the bank had the obligation of providing adequate supply of clean banknotes to facilitate seamless payment and settlement of transactions by the public, government, and banks.
It was gathered that the CBN Governor Godwin Emefiele is set to launch apex bank’s “clean note policy and banknote fitness guidelines”.
The clean note policy provides a uniform standard for the circulation of only clean and fit banknotes; while the banknote fitness guidelines provide the industry with clear and acceptable criteria for determining the quality of notes in circulation.
The policy guidelines, the regulator said, were developed after extensive collaboration and engagements with key industry stakeholders under the auspices of the Nigerian Cash Management Scheme, a Bankers’ Committee initiative.
The plan will ensure that unfit, dirty, mutilated and counterfeit banknotes are not in circulation. This is pursuant to Sections 18, 20 & 21 of the CBN Act 2007 which prohibits the counterfeiting, sale and abuse of the naira.
The official further stated that “Despite the prevalence of other forms of payment, cash remains ‘king’ in our day to day economic transactions. As such, people still prefer to use cash in making payments especially where there are no digital payment platforms.
“Consequently, demand for cash continues to grow despite technological advances. Thus, the volume of currency in circulation as at the end of 2012 rose significantly by 10.34 per cent to 7,914.70 billion pieces, as at half year of 2018. A large proportion of the notes in circulation were dirty, mutilated, not fit for ATMs and over-the-counter payments.
“To overcome the challenge, the CBN increases the supply of clean notes and withdraws the soiled and mutilated notes from circulation.
“In addition, the bank introduces from time to time a number of currency management initiatives to ensure that the production, issuance of new notes, processing by third service providers as well as recirculation by the deposit money banks (DMBs) conform to the predetermined standards.
“To ensure that the banknotes in circulation are clean and of high quality, the bank hereby issues the clean note policy. The clean note policy enunciated therefore by the bank, entails a spectrum of diverse currency management activities geared towards the efficient circulation of premium quality banknotes and withdrawal of unfit/soiled banknotes to guarantee public confidence and usage of the naira banknotes as a medium of exchange”, the CBN officials said.