CBN to sanction banks, BDCs rejecting old, small dollar denominations

The Central Bank of Nigeria has warned Deposit Money Banks to stop rejecting old and small denominations of the United States dollar bills.

CBN threatened that there would be sanctions for rejections.

It also urged Bureau De Change operators and the public to desist from defacing the notes.

The CBN issued this warning in a circular signed by the acting Director of the Currency Operations Department of CBN, Solaja Mohammed, with reference: COD/DIR/INT/CIR/001/017 on Tuesday.

It said the directive followed the outcome of a customer market intelligence conducted by the bank which revealed rejection of old/lower denominations of dollar bills by commercial banks and forex traders.

The acting director, recalling a 2021 circular noted, that the bank’s directive which frowns at the selective acceptance of deposits is still in force and must be adhered to by all parties.

The circular read, “The outcome of the consumer market intelligence conducted by the bank revealed the continued rejection of old/lower denominations of United States dollar bills by Deposit Money Banks and other authorised forex dealers.

“Kindly be reminded that the CBN circular referenced COD/DIR/INT/CIR/001/002 and dated 9th April 2021 which explicitly frowned at this selective acceptance of deposit is still in force and must be adhered to and complied with by all relevant parties.

“For the avoidance of doubt and further guidance on the circular, the content is hereby reissued as follows for strict compliance: all DMBs /authorised forex dealers should henceforth accept both old series and lower denominations of United States dollars that are legal tender for deposit from their customers.

“The CBN will not hesitate to sanction any DMB or authorised forex dealers who refuse to accept old series/lower denominations of US Dollar bills from their customers.

“In addition, all authorised forex dealers are advised to desist from defacing/stamping US dollar banknotes as such notes always fail authentication tests during processing/sorting. Please note for immediate compliance.”

This development is coming months after the Economic and Financial Crimes Commission began the arrest and prosecution of Nigerians mutilating and defacing the naira.

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