N165bn old notes return to banks as Buhari unveils new naira

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One hundred and sixty five billion old naira notes have so far been absorbed by commercial banks since the announcement of the planned launch of new naira notes on October 26.

Director Currency, Central Bank of Nigeria (CBN), Ahmed Bello Umar, made the disclosure in Abuja at a post-Monetary Policy Committee media briefing.

According to him, the amount deposited thus far was small compared to what the apex bank has anticipated.

He also revealed that the apex bank will from Thursday, begin reticulating the new naira notes to all its branches across the country since the currency has been officially launched by President Muhammadu Buhari at the presidential villa on Wednesday.

He added that the new notes will be available for spending from December 15, even as he reiterated the federal government’s position that the no extension will be given to the old naira notes beyond January 31.

He said: No extension will be given. From Thursday, we will start distribution to our networks and not to customers yet.

“We have N3.2 trillion currency in circulation and out of this, N2.7 trillion is outside the banking system. As at 18th of November, N165 billion has been deposited since the announcement. The amount is small and we are not seeing the rush. Some banks have not made any recoveries of the old notes. It’s a challenge for us and we hope there won’t be stampede when it’s almost the deadline. We have made several concessions to encourage deposit. We removed all deposit limits, mandated the banks to work of Saturday, etc

“We hope that 80 per cent of the N2.7 trillion will come back. We are also pessimistic that we may record 40 per cent recovery and the reality is around 60 per cent recovery”.

Umar said the bulk of the new notes will be lower denomination, adding that 88 per cent of the money returned to the banks by customers were N500 and N1,000 notes. 

“We won’t print much of the high denomination. We will have currency for transaction which is more like the N200 note.

We want to drive cashless policy, mobile money, electronic payments etc. And this is certainly not an exchange programme where a customers deposits let’s say N10 million of the old currency and expects to get N10 million equivalent of the new currency. Deposit the money in your account and spend it more through electronic means. That’s what we want to achieve”, he added.

Also speaking at the event, the Director, Development Finance Department of the CBN, Mr Yusuf Yila noted that apex bank was working with insurance companies to see ways of assisting farmers ameliorate their sufferings following the heavy flooding that destroyed their agricultural investments.

“With the right evidence, we can restructure the loans of those who suffered losses. But you have to pay back the loan you received”, he said.