Following the redesigning of the N200, N500 and N1 ,000 banknotes, the Senate in a unanimous resolution urged the Central Bank of Nigeria (CBN) to extend the deadline for the return of the old currency from January 31, 2023, to June 30, 2023. The resolution of the Senate was sequel to a motion titled, “Urgent need to extend the withdrawal of old currency from circulation,” sponsored by former Senate Leader, Senator Ali Ndume, APC, Borno South. Ndume who noted that the timing of the policy was wrong, said since the beginning of the implementation of the cash withdrawal limits, the new notes had not been in circulation even in cities not to talk of the rural communities.
The CBN had on November 8, said it had finalized arrangements for the new currency to begin circulation from December 15, 2022, after its launch by President Muhammadu Buhari. It had explained that the new and existing currencies would remain legal tender and circulate together until January 31, 2023, when the existing currencies would cease to be legal tender.
Senator Ndume said many Nigerian banks in accordance with the stipulations of the Central Bank had on Thursday 15 December 2022, opened their vault to customers and depositors to exchange their old naira notes for the newly redesigned currency, which had the deadline of 31 January 2023. He noted that some Nigerians already envisaged rush and long queues in banking halls across the country as people tried to get access to the new naira notes unveiled by President Mohammad Buhari at a brief ceremony at the State House, Abuja.
Ndume also observed that while the old notes were expected to be in circulation alongside the new ones until 31 January 2023, when the old notes are expected to be phased out, it was expected that many Nigerian businesses would start to reject the old notes as soon as the banks started paying out the redesigned notes to customers but access to the new notes could be compounded by the CBN circular which limited the amount of cash individuals and corporate entities could withdraw within a certain period of time.
The CBN had said individuals could only withdraw N100, 000 per week while corporate entities could only have access to N500, 000 a week through over-the-counter (OTC) transactions. The CBN stipulated that access to large quantities of cash above the limit would attract processing fees of 5 per cent and 10 per cent for individuals and corporate entities respectively. Large withdrawals were also subjected to scrutiny by the regulator to determine the importance and usage of such cash; and convinced that if the withdrawal of old notes from circulation was not extended beyond 31 January, many Nigerians would be thrown into hardship. It was, therefore, necessary to avoid a repeat of 1984 experience withdrawal of old notes.
However, Ndume failed to acknowledge that the CBN had already announced an upward review of the cash withdrawal limits across all payment channels by individuals and corporate organisations. Under the updated regime, the apex bank had said effective January 9, 2023, individuals and corporate entities could withdraw a maximum of N500,000 and N5 million, respectively, away from N100,000 and N500,000, respectively, which was announced on 6 December, 2022. In an updated circular dated 21 December 2022, and addressed to all Deposit Money Banks (DMBs) and Other Financial Institutions, Microfinance Banks, Mobile Money Operators, and Agents, the CBN had explained that the upward review was as a result of the feedback it received from stakeholders. The correspondence was signed by CBN Director, Banking Supervision Department, Mr. Haruna Mustafa. In a related development, the Central Bank of Nigeria has called on Nigerians to handle the new naira notes with care as they are circulated across the country for use. The Apex bank made the appeal on Twitter. The Central Bank urged Nigerians to embrace the new naira notes, adding that the security features had been enhanced to curb counterfeiting. The CBN announced earlier that the 200, 500, and 1000 naira notes would be redesigned and that the old notes would cease to serve as legal tender by 31 January 2023.