CBN approves 7-day grace after February 10 deadline
The Central Bank of Nigeria, CBN currency redesign programme has pulled 1.9 trillion Naira into bank vaults in three months. It has now allowed a 10-day extension to bring in the remaining N900 billion, which it believes still circulates outside the banking system.
Although the apex Bank reserves the right to redesign the currency every 5-8 years, the primary reason for this current programme was to mop up the excess cash circulating outside the banking system and fuel criminality.
When the CBN announced the redesign of the currency, currency in circulation had risen to N3.2 trillion, from N1.4 trillion in 2015; out of which only 500 billion was within the banking industry and N2.7 trillion “held permanently in people’s homes”.
To mop up the targeted N900B, the CBN announced: “a 10-day extension of the deadline from January 31, 2023, to February 10, 2023, to allow for the collection of more old notes legitimately held by Nigerians and achieve more success in cash swap in our rural communities after which all old notes outside the CBN lose their legal tender status”.
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Also, read CBN shares 9 trillion Naira to combat food inflation
Additional 7-day grace period to be granted after February 10 deadline
“There will be an additional 7-day grace period, beginning on February 10 to February 17, 2023, in compliance with Section 20 (3) and 22 of the CBN Act allowing Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have lost its lender tender status, the apex bank said in a statement.
The CBN released the redesigned currency on December 15 and started a campaign to mop up all old notes. Compliance had peaked over the past few weeks as the deadline approached, but hiccups had remained, as the supply of the new notes has been limited.
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The National Assembly has mounted pressure on the CBN to extend the deadline to allow time for the new notes to circulate in the system and allow rural dwellers without access to the banking system sufficient time to swap their old notes.