New naira: Banks, customers pressure CBN to shift Jan 31 deadline

As bankers and clients lobby for the extension, the Central Bank of Nigeria may come under pressure to extend the date for the old naira notes to stop being accepted as legal cash.

Banks continue to give the old notes to their customers even though the old notes are supposed to be taken out of circulation by January 31.

The apex bank was under increasing pressure, according to news outlets, to extend the deadline so that the old notes can be collected and the new ones can circulate effectively.

It was learnt that prominent among the stakeholders were managing directors of banks and their management teams, but a source close to the chief executive of a Tier-1 lender told one of our correspondents on Friday that the bank managing directors could not make the call for the deadline extension openly as the decision on the redesign of the naira had their approval.

The source stated, “It is tue that the bank MDs are not comfortable with the fact that the new notes are not circulating the way they had anticipated, but they can’t publicly ask for an extension of the deadline as they were part of the decision to redesign the currency and withdraw the old notes from circulation.

“However, because of the failure of the CBN to supply enough new notes and the pressure this is putting on their banks, the managing directors are lobbying the apex bank to consider the extension of the deadline through the backdoor via the auspices of the Bankers’ Committee. It is a sensitive issue.”

On Friday, a top CBN official confided in newsmen that the apex bank might give in to demand for a deadline extension.

He asserts that a new date might be revealed either ahead of or at the CBN Monetary Policy Committee meeting scheduled for this coming Wednesday, January 25, 2023.

He stated, “It is clear that the CBN has not supplied sufficient new currency notes to the banks. Even many of us in the CBN have not seen the new notes. The absence of the CBN governor has also clouded the issue and that is why no statement has been made regarding the extension of the deadline.

“From the look of things, most certainly, a new deadline may be announced before the end of the month or during the MPC meeting coming up between January 24 and 25.”

A bank manager in the Ikeja area of Lagos, who spoke on condition of anonymity because she was not authorised to talk to the media, stated, “We have been mandated to load all our machines with the redesigned naira notes, but we still don’t have much of the notes in circulation to load in all the machines across the country. What we have agreed is that at least one machine must be loaded in all locations with the new naira notes, because CBN officials have started moving around banks to confirm the level of compliance.

“Two of the CBN officials visited one of our branches today (Thursday) and asked questions if the bank ATMs were dispensing new notes; they also joined the custodians in the ATM room in loading the machines and confirmed that the new notes were being dispensed to customers; they went ahead to ask why some machines were still dispensing old notes and the response given was that the new notes supplied were not enough.

“They requested the evidence of cash supplied from our bullion team and ensured that the same was loaded in the ATMs as we have been mandated not to pay any single note across the counter.”