Legal tender crisis: ATMs dispense old notes, as banks reject old notes deposit

…Direct customers to follow CBN guidelines for deposit

…Stakeholders lament failure of electronic platform

…Nigerian economy loses N20 trillion over cash crisis — Muda Yusuf

…NSCDC raises concerns over circulation of fake redesigned Naira notes

By Seun Ibiyemi

Barely 10 days after the Supreme Court ordered that old Naira notes should remain in circulation, Nigerians are facing challenges of depositing money collected from Automated Teller Machines (ATMs) as banks have continued to reject collection of deposits from customers, directing customers to follow Central Bank of Nigeria (CBN’s) guidelines set for deposit of old notes.

This is even as stakeholders lamented over failure of banks electronic platform system due to congestion.

Findings revealed that Polaris Bank and First Bank and others had started to pay old N1,000 and N500 notes to their customers.

This came about three days after Guaranty Trust Bank Plc, Zenith Bank Plc and Sterling Bank started dispensing old N1,000 and N500 notes to their customers.

Meanwhile, many customers were shocked after some Deposit Money Banks that dispensed the old Naira notes declared that they would not accept the old notes from their customers.

Many of the banks gave their customers conditions to be fulfilled before they would allow the old notes to be deposited in the DMBs by their clients.

This created confusion among customers, who also complained that the old notes were being rejected by traders, filling stations, transporters and other businesses in the capital city.

Customers who formed massive queues in front of several banks, expressed surprise that the banks were paying old notes and were at the same time rejecting the old notes when one attempted to deposit it.

“They are asking us to go and generate online codes from the Central Bank of Nigeria before we can deposit the same old notes that they dispensed to us,” a Bank customer in lagos, who simply identified herself as Opeyemi, stated.

Also Stakeholders have expressed worry concerning the silence of  the Federal government and Central Bank of Nigeria (CBN) about grounding of the economy following  rejection of old notes for business transactions.

The controversy culminated in a Supreme Court ruling March 3, 2023, which validated the use of old naira notes till December 31 2023.

However the Supreme Court order has not resolved the issue, as many Nigerians are still unwilling to accept the old notes, saying they need to hear from President Muhammadu Buhari or from the Central Bank of Nigeria (CBN).

The rejection has left some Nigerians stranded, generating confusion among Nigerians, with many calling on the Federal government to provide clarity on the Supreme Court ruling.

Also some state governments have threatened to sanction anyone who rejects the old notes for business transactions, while others are urging the Central Bank of Nigeria (CBN) and Federal government to make official statement on the matter.

Reaction 

Nigerian economy has lost an estimated N20 trillion – Muda Yusuf

Reacting to Nigerian NewsDirect, the Director/CEO Centre for the Promotion Of Private Enterprise (CPPE), Muda Yusuf said that “the protracted acute cash scarcity has not only crippled economic activities in the country, it is now a major risk to the livelihoods of most Nigerians.

“Millions of citizens have slipped into penury and destitution as a result of the disruptions and tribulations perpetrated by the currency redesign policy, especially the mopping up of over 70 per cent of cash in the economy.

“Nigerians have not been this traumatised in recent history. The economy is gradually grinding to a halt because of the collapse of payment systems across all platforms.

“Digital platforms are performing sub-optimally because of congestion; physical cash is unavailable because the CBN has sucked away over 70 per cent of cash in the economy; and the expected relief from the Supreme Court judgement has not materialised. The citizens are consequently left in a quandary.

“The banks claim that the CBN has not officially communicated the Supreme Court judgement to them for any action; the President has maintained a worrying muteness on the judgement; the market women and men are waiting to hear from the President Buhari or the CBN governor on the legal tender status of old currency notes.

“Curiously, there is an apparent reluctance or unwillingness by the federal government and the CBN to comply with the Supreme Court judgement.

“This is very disturbing and inexplicable.

“Meanwhile, Nigerians continue to groan in the adversity inflicted by the acute cash shortage amid rejection of old currency notes by market operators, refusal by banks to accept the old notes, silence by the presidency on the supreme court judgement; and absence of official pronouncement by the CBN on the issue.

“Retail transactions across sectors have become nerve-wracking and distressing as payment system challenges persist. Since the onset of the cash crisis, the Nigerian economy has lost an estimated N20 trillion.

“These losses arose from the deceleration of economic activities, the crippling of trading activities, the stifling of the informal economy, contraction in the agricultural sector and the paralysis of the rural economy.

“There are also corresponding job losses in hundreds of thousands. Evidently, President Buhari does not seem to appreciate the gravity and enormity of the suffering and pain that Nigerians have been experiencing since the onset of the currency redesign policy.

“We again plead with the President to immediately intervene to put an end to the devastating and traumatic outcomes of a repressive, poorly conceptualised and badly implemented currency redesign policy.

“We request the following immediate actions. The CBN should be directed to immediately inform the Nigerian public that the old currency notes alongside the new notes remain legal tender until the 31st December 2023, in line with the supreme court judgement.

“The CBN should be directed to officially communicate the outcome of the Supreme court judgement to the banks and affirm compliance with the judgement.

“The President should publicly empathise with Nigerians on the unwarranted and inexcusable pain and suffering that the currency redesign policy has wreaked on them.”

CBN silence is draining economy — Adeyeye

Speaking to Nigerian NewsDirect on telephone chat, an economic analyst, Samuel Adeyeye said, “the body language of the federal government, the president and the CBN have been against it, acted silent, and nonchalant towards the Supreme Court judgement, contrary to our position, which has been given.

“The government thought various political parties will influence their votes buying with the old notes, for some that have stocked their houses and warehouses with the old notes.”

He further stated, hopefully, they would give a definite response or position after the Gubernatorial election and noted that it is bad “if the banks can issue old notes and people are still rejecting it at the bus terminals, fuel stations, traders and workers are all rejecting it. It is a wrong signal to the economy.”

“The economy is draining with these confusion happenings among the people and silence of the CBN for directives because everyone is being affected especially the artisans, low income earners, taxi drivers and traders in the market that are not into the flow with the cashless policy programme by getting their ATM cards and necessary equipment on how to go about it or get cash. They are the ones bearing the consequences and paying the brunt the more,” he said.

“However, the middle income earners are going by their normal daily activities as they can afford to do transaction with their ATM cards and they can go along with the cashless world,” as he  stated, “they barely have nothing to lose compared to the common man,” who he stated, “are the ones really bearing the brunt, which is basically why the economy is draining drastically because usually the economy is a cash based policy but with this scarcity of cash policy and turning to cashless overnight, it is a detriment to the economy cycle and its subsequent impacts,” he concluded.