Banks in brisk business with new naira notes, reject old bills


By management directive or individual discretion, banks in the country have gradually become an outlet for new notes to currency hawkers, who in turn make brisk business at various party centres across the country, particularly Lagos State.

Banks in brisk business with new naira notes, reject old bills
Banks in brisk business with new naira notes, reject old bills


The sale of the clean bills for older ones currently goes for as high as 20 per cent of the value being exchanged, that is, N1000 old notes go for N800 new ones.

The CBN Act 2007, Section 21, sub-section 3 and 4, said: “For the avoidance of doubt, spraying of, dancing or marching on the Naira or any note issued by the Bank (CBN) during social occasions or otherwise howsoever, shall constitute an abuse and defacing of the Naira or such note and shall be punishable under Sub-section (1) of this section.

“It shall also be an offence punishable under sub-section (1) of this section for any person to hawk, sell or otherwise trade in the Naira notes, coins or any other note issued by the Bank.”

Ordinarily, currencies are distributed to the public by commercial banks, despite the fact that CBN does the printing through its minting arm.

“There is no other way the new notes get to the hawkers except through the banks. CBN does not deal with individuals. The arrangement could either be management decision or individual interest, especially those that work in the unit where notes are received and exchanged in banks.

“This explains why the ATM and even their over-the-counter withdrawals are full of dirty currencies. These days, if you go to bank with the hope of getting clean notes, you will surely be disappointed. It makes nonsense of the whole thing,” Abuchi, an angry customer retorted.

The Acting Director of Corporate Communications Department, CBN, Isaac Okorafor, said CBN does not deal with the public directly and “the new notes you see are in replacement of unfit ones returned to us by banks, and they are the channels we use in replacing them too.

“However, how individuals get them in commercial quantity for street hawking or at party venues is left for the security agencies to find out. If the security agencies use at least one person to set an example, others would desist from the act.

“We can’t go to places where people are doing party in the day or night to arrest people. That is not our mandate. It is in the CBN Act that hawking of the currency is illegal.”

But another source at the apex bank said the security agencies, especially the police, which have the capacity to arrest and prosecute law breakers, have not taken time to deal with the issue.

Meanwhile, the over-the-counter and ATM transactions have also been marked by dirty notes, sometimes mixed with new notes and unfit ones.

The Guardian investigations in 21 branches of 11 banks, including the “big ones” showed that they have more of dirty notes and some near-unfit ones, than clean notes.

Two bulk tellers from two banks told The Guardian that they have the discretion to sort out dirty notes and even reject them when customers come with them, because “if you collect unfit note, it would be debited against you.”

Another one alleged that his boss has informed them that CBN charges the bank for the unfit notes when they return them for replacement. But the apex bank spokesman has refuted the allegation.

During the investigations by The Guardian, a customer who just experienced the rejection in one of the big banks queried where else one can return unfit and dirty money besides the banks.

In 2011, there was an initiative that took care of the “sorting” of unfit notes in banks, where CBN is to bear the cost of the transportation of unfit cash generated from processing.

The banks were expected to avail themselves of the currency sorting capacities of the registered service providers when they commence currency sorting.

According to Okorafor, banks are not willing to make any investment in that direction, instead they bring dirty notes to CBN without sorting out the unfit.

“These banks are playing tricks in this aspect. They will see unfit notes and re-issue them again because they don’t want to make investments in sorting the money. It is their duty to return unfit notes to us and we will replace them with new ones. There is no way they will bring in unfit notes and we will charge them.

“If banks sort the money before bringing it to CBN, we don’t charge them, but if they don’t, we will sort it and charge them. It is only when they mix up the unfit and good ones together, which is what they do. But it is our duty to issue new notes in place of the unfit and that we have been doing.

‘‘Any person with such complaints should report to our consumer protection department through, stating the name of the bank.’’

He reiterated that the cause for rejection should not be the dirtiness of money, but if the numbers on the money are incomplete.

“If the numbers are complete, no bank has any right to reject the currency no matter how dirty it is,” he said.