Home Nigeria CBN Mutilated Notes no Longer Acceptable, Defaulters to Face Sanctions

CBN Mutilated Notes no Longer Acceptable, Defaulters to Face Sanctions

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By Uche Amunike

The Central Bank of Nigeria (CBN) has announced over the weekend that, that CBN mutilated notes will no longer be accepted from Deposit Money Banks (DMB) henceforth, stressing that any DMB that included such notes in their deposits with the Apex bank, will face sanctions.

In a circular signed by the Director of the Currency Operations Department at the Apex bank, Ahmed Umar, he stated that the new directive took place from April 1, 2022.

The bank showed concern over the increase in the number of such CBN mutilated notes in circulation, explaining that such notes are mutilated currency notes that are made up of several parts of different banknotes of the same denomination usually put together in order to receive value.

Umar explained that the use of those CBN mutilated banknotes gives a false value of the currency in circulation and also encourages fraud. This is why the CBN Management has decided that any such currency discovered in the deposit of the DMBs shall attract a sanction of 400% of the value of the money.

Hear him: ‘The management of the CBN observed with concern, the increasing number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public’.

‘Consequently, any composed banknote discovered in the deposit of DMBs shall attract a penalty of 400 per cent of the value’, the bank reiterated.

This implies that the CBN will commence placing a fine of N4000 on every mutilated N1000 note discovered in banks’ deposits with the Apex bank.

In recent times, the apex bank has been at the forefront of the campaign of ridding the economy of these CBN mutilated notes.

Recall that in February 2020 about 100 tonnes of such bad currency were generated as waste and destroyed every week through open-air burning at its 12 disposal centres nationwide.

The Apex bank had stated in her released Annual Report 2020 that in 2020 alone, it disposed of a total of N698,480.00m worth of unfit banknotes, as disclosed by the department of currency operations in the bank.

The constant destruction of mutilated banknotes is regularly carried out by the CBN under strict security and with the permission of section 18b of the CBN Act 2007 which mandates the destruction of currency notes and coins withdrawn from circulation under the provision of section 20(3) of the said Act or otherwise found by the bank to be unfit for use.

CBN reports in 2020 stated that the reason why the bank sustained banknotes disposal operations was to enable them circulate clean banknotes. Furthermore, it deployed eleven (11) Banknote Destruction Systems (BDS) and three (3) Currency Disintegrating Systems (CDS) for currency disposal activities in the period under review.

The negative impacts of waste disposal by open air burning of bad banknotes include pollution and other health hazards, thereby leaving the Central Bank of Nigeria with no choice than to seek for a more environmentally sustainable method in order to reduce its carbon footprint.

 

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