CBN Gives Directive to Banks After Supreme Court Ruling on Old N200, N500, N1000 Notes

• The CBN has given a new directive to Nigerian banks on the validity of old and new notes
• This came after the Supreme Court ruling which legalizes the use of old N200, N500, N1,000 notes
• It stated that all notes issued by the CBN will continue to remain legal tender indefinitely

The Central Bank of Nigeria (CBN) has given orders to banks on the issuance and acceptance of old and new notes in the country.

This is contained in a notice by the CBN signed by Sidi Ali Hakama, the bank's acting director of Corporate Communications.

Legit.ng had earlier reported that the Supreme Court legalized the use of old N200, N500, and N1,000 Notes.

The apex court ordered that the old notes remain legal tender until necessary facilities are put in place for their replacement.

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Bank to continue accepting all denominations

In line with the Supreme Court's order, the CBN ordered that banks across the country treat the old and redesigned currency as legal tender.

“Following the order of the Supreme Court on Wednesday, November 29, 2023, granting the prayer of the Minister of Justice and Attorney-General of the Federation to extend the use of old Naira banknotes ad infinitum, the Central Bank of Nigeria (CBN) has directed all its branches to continue to issue and accept all denominations of Nigerian banknotes, old and re-designed, to and from deposit money banks (DMBS).

“For the avoidance of doubt, the Supreme Court ordered that the old versions of N200, N500, and N1,000 banknotes shall continue to be legal tender, alongside the re-designed versions. Accordingly, in line with Section 20(5) of the CBN Act 2007, all banknotes issued by the Central Bank of Nigeria (CBN), will continue to remain legal tender, indefinitely."

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The bank urged members of the public to continue to accept both the old and re-designed notes for their day-to-day transactions.

It also urged that the currency be handled with the utmost care to safeguard and protect the lifecycle of the banknotes.

Charles Abuede, a financial analyst said the CBN's directive comes at a time when the average Nigerian is grappling with heightened inflation and diminished purchasing power, particularly as the festive season approaches.

He said,

"This directive is set against the backdrop of the currency crunch experienced at the beginning of the year, which consequently exerted downward pressure on the national output in the first quarter. From an economic standpoint, the policy direction is commendable, as it seeks to alleviate the financial burden associated with printing and distributing new banknotes across various banks. Moreover, it takes into consideration the potential inconvenience that Nigerians might face when exchanging the old notes for the new legal tender"

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Legit.ng reported that the governor of the CBN, Olayemi Cardoso, revealed that over N10 trillion has been loaned to customers under various intervention schemes.

CBN data showed that between September and October 2022, the apex bank disbursed about N41.02 billion to several agricultural projects under the Anchor Borrowers' Programme (ABP).

The total disbursement under the ABP scheme amounts to N1.07 trillion to about 4.6 million smallholder farmers growing 21 commodities nationwide.

Source: Legit.ng