The Central Bank of Nigeria (CBN) will soon mop up all mutilated banknotes across the country and penalise any bank that issued counterfeit notes through any of its payment channels. The Director, Currency Operations of CBN, Mrs. Priscilla Elene, disclosed the plan in Lagos during the unveiling of the Bank’s “Clean Note Policy and the Banknote Fitness Guidelines.” The plan to withdraw all mutilated notes in circulation would take effect soon.
The CBN will also give a time frame within which the banks will bring all the mutilated notes in the vaults. Consequently, the banks have been urged not to reject mutilated notes from customers but to bring them to the CBN at the commencement of mopping operation. Banks will pay a fine of N1million for any counterfeit banknotes detected via Automated Teller Machines (ATMs) or across the counters. According to CBN, ATMs are expected to have only mint and close to mints dispensed.
Under the CBN new guidelines on currency mutilation and counterfeiting, branch controllers of Deposit Money Banks in the country have been empowered to work with security agencies in their respective states to ensure that cases of currency mutilation are addressed. There is no doubt that banknotes remain important for payments and settlement of commercial transactions in the country. Therefore, the plan by the CBN to register eight firms to carry out cash-in-transit companies to promote effective and efficient currency management in the country is laudable.
We believe that the plan by the CBN to tighten the noose on currency mutilation and counterfeiting is good. The CBN last year initiated efforts to rid the economy of dirty currency notes with direct disbursement of new banknotes to marketers, merchants, shopping malls, supermarkets and tollgates across the country.
To curb hawking and mishandling of the naira, the government established mobile courts that would try offenders with the collaboration of the police and the Federal Ministry of Justice. Those convicted of the offence would serve six months imprisonment or a fine of N.1million or both. Though the CBN had in 2017 stated that the prevalence of counterfeit banknotes was less than one per cent or 14 counterfeit out of one million banknotes, a former Deputy Governor of the CBN, Dr. Obadiah Mailafia, told the National Assembly during a public hearing on the 2017 budget that about 20 per cent of the total currency in circulation across the country was counterfeit. However, to ensure the circulation of clean banknotes, the apex bank, should work together with banknote suppliers, deposit money banks, manufacturers of currency management equipment, currency transportation and processing companies, security agencies and the public.
Ahead of the mop up of all mutilated banknotes, it is expected that the apex bank should know the volume of currency in circulation and the number of counterfeit naira notes in the system and how to curb the menace. Therefore, the CBN should embark on a sustained public enlightenment campaign on how to detect counterfeit notes. No doubt, currency management is vital in all financial transactions. It is sad that despite the improvements in electronic payments, banknotes remain predominant for payment and settlement of commercial transactions in the country.
Let the CBN consider other measures that will make the national currency something to be proud of. For instance, there is need to improve the security features in our currency notes so that it will be extremely difficult for forgers. In recent years, the police had arrested fakers of the nation’s currency in Borno and Lagos states.
We support the new plan to preserve the nation’s banknotes and urge Nigerians to handle the naira properly. They should heed this advice considering the fact that it is a criminal offence to abuse the national currency. Moreover, the nation’s currency is the identity of the country and therefore should be respected.