CBN to sanction banks over failure to accept old/lower denomination of US Dollar
…directive to discourage hoarding, improves liquidity — ABCON President
By Kayode Tokede
The Central Bank of Nigeria (CBN) has warned that Deposit Money Banks (DBMs)/ authorized foreign exchange dealers who refused to accept old/lower denomination of US Dollar from customers are to face sanction.
The apex in a circular tagged, “The rejection of old/lower denomination of United States Dollar by DMBs/Forex Dealers” to all DMBs, Bureau De Change Operators and the general public stated that, “CBN in recent times been inundated with complaints from members of the public on the rejection of old/lower denominations of US Dollar bills by DBMs and other authorized foreign exchange dealers.”
The Director, Currency Operations Department, CBN, Ahmed Umar who signed the circular on Tuesday said that, “All DMBs/authorized foreign exchange dealers should henceforth accept both old series and lower denominations of United States Dollar (USD) that are legal tender for deposit from their customers.
“In addition, all authorized foreign exchange dealers are advised to desist from defacing/stamping US Dollar Bank notes as such notes always fail authentication test during processing/sorting.”
Reacting, the President, Association of Bureau De Change Operators of Nigeria (ABCON), Alh. Dr. Aminu Gwadabe, in a text message said, “The CBN directive to sanction banks on failing to collect old/stamp stamp foreign currency cash notes over the counter is measure taking at the right time especially now that foreign currency inflow and liquidity is at lowest ebb.
“The measure will go a long way to discourage hoarding and improves liquidity in the market. The public and more especially our clients will have confidence on the traded notes ab initio rejected by our numerous clients. I sincerely believed the measure is as a result of proactive intelligence gathering of the apex bank.
“It is therefore a bold step from the part of the CBN to ensure availability of the foreign currency notes in circulation.”
This is coming weeks when the apex bank introduced ‘Naira 4 Dollar Scheme’ for diaspora remittances, which offers recipients of diaspora remittances through CBN’s International Money Transfer Operations (IMTOs) to be paid N5 for every $1 received as remittance inflow.
The scheme took effect from Monday, March 8, 2021, and ends on Saturday, May 8, 2021.
The circular dated March 5th, 2021, and signed by the Director, Trade and Exchange Department, A.S Jibrin, stated that, “In an effort to sustain the encouraging increase in inflows of diaspora remittances into the country, the CBN hereby announces the introduction of the ‘CBN Naira 4 Dollar Scheme,’ an incentive for senders and recipients of international Money Transfers.
“Accordingly, all recipients of diaspora remittances through CBN licensed IMTOs shall henceforth be paid N5 for every USD1 received as remittance inflow.
“In light of this, the CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every USD1 remitted by sender and collected by designated beneficiary. This incentive is to be paid to recipients whether they choose to collect the USD as cash across the counter in a bank or transfer same into their domiciliary account.
“In effect, a typical recipient of diaspora remittances will, at the point of collection, receive not only the USD sent from abroad but also the additional N5 per USD received. Please note having discussed with banks and IMTOs, the scheme takes effect from Monday 8 March 2021 and ends on Saturday 08 May 2021.”
The initiative was supported by DMBs as some advertised it to their customers. It also appears to be an attempt by the CBN to compete with the black market and other unofficial avenues of receiving foreign exchange.
