New naira: Confusion deepens as CBN deadline ends today
Written by Ossy on February 10, 2023
Nigerians, especially bank customers, were gripped with confusion and uncertainty over whether today’s deadline by the Central Bank of Nigeria for the phasing out of the old naira notes still remains or it has been suspended following the Supreme Court injunction obtained by some northern governors.
The Supreme Court had on Wednesday ruled that the deadline should be suspended pending the determination of the case brought before it by the governors of Kaduna, Kogi and Zamfara States.
The court has fixed February 15 to entertain the case. However, the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, SAN, in a response to the suit later on Wednesday, among other things, said the Supreme Court lacked jurisdiction on the matter.
However, on Thursday, a day before the deadline, commercial banks in the country and bank customers were thrown into confusion as to whether the old N1000, N500 and N200 would cease to be legal tender by Friday (today) or will retain the status pending when Supreme Court will look into the suit brought before it by the governors.
Several top bank executives, who spoke to The PUNCH on condition of anonymity, because they were not authorised to speak on the matter, said they could not tell whether the Friday deadline would be enforced.
They hinged their argument on the grounds that the CBN-the banking sector regulator-had yet to give directives to banks.
They also argued that the governors did not join banks in their suit.
When contacted, a top official of Access Bank, who would not want to be quoted said, “I cannot say yes or no. You know there is a court judgment so for now, there is a Supreme Court judgment and we have not received any further communication from the CBN on it.”
Another top source of Ecobank, while reacting to enquiries by The PUNCH said, “We don’t know what will happen yet. You know the deadline is Friday (today), so we will still collect old naira notes on Friday but after that, we don’t know what will happen.”
Furthermore, a top management official of Zenith Bank, who spoke to The PUNCH on condition of anonymity, said, “As it is now, Friday is the deadline but there is a Supreme Court judgment so, we don’t know what will happen. For now, there is no new circular from the CBN that there will be any extension.”
Also, an executive of Polaris Bank said the lender was awaiting communication from the CBN on the matter.
“As it is now, we don’t know whether Friday is the deadline for the phasing out of old notes or we need to wait till next week when the Supreme Court will sit on the matter,’” the official said.
Also speaking on the matter, a top executive of a tier-2 bank, said, “There has been no directive from the CBN on the matter, as to whether to stay with the February 10th deadline or not. As the situation is, new notes are not coming in from the CBN as they should.
“The banks only have a few old notes in their vaults which they can’t even pay out. Sadly, because of the paucity of new notes, some banks only load their ATMS once a day, instead of three to four times”.
POS operators cash-trapped
The development came as cash-strapped Point of Sale operators shut their businesses while several banks remained shut on Thursday.
Officials said Nigerians might face hard times over shortage of cash in the coming days as the situation worsened.
Some bankers claimed that the CBN had limited the volume of cash it distributed to banks.
Speaking on the condition of anonymity, the bankers revealed that the CBN could do more to alleviate the cash scarcity that Nigerians are facing.
One of the bankers, who spoke with our correspondent, said, “The CBN is hoarding supply to branches. They refused to release the new naira notes. Old lower denominations are what they are giving banks now but in low quantity.”
Another banker said, “Cash is limited. We know it’s all about financial inclusion but if people are unable to use their account for its original purpose and they want us to go all tech, there will be issues. Regarding cash supply, there’s more that CBN can do.”
Dismissing any notion of pressure, a banker said, “People are not moved by the CBN’s deadline. Unlike the last one when people were sure that if they deposited old notes, they would be able to get the new notes in a swap or N500m in old notes and get the same in the old notes. People are not moved. I haven’t seen anything to suggest people will comply but let’s see how tomorrow will be.”
Asked whether customers are bringing in their old naira notes ahead of the deadline, one of the bankers said, “No they are not. In fact, banks are begging customers to bring cash so they can have money to support cash activities.”
Another banker, who gave his name as Emese said, “The reactions have been mixed. There’s the Supreme Court ruling on the matter for instance.
“Customers are bringing in cash. The crowd isn’t that much but about 2 pm to 3 pm. today (Thursday), people started coming into the bank to deposit their cash.”
A banker in one of the leading banks added, “It is not what we expect but it is in line with the CBN cashless policy. It is not going to be a case of taking one trillion out of circulation and putting it back.”
The President, Major-General Muhammadu Buhari, (retd.) had on Friday last week, asked Nigerians to give him seven days to resolve the naira crisis.
But Nigerians on Thursday faced hard times as the crisis persisted. Traders and business owners have said that they would consider keeping their money at home rather than using the banks even when the naira scarcity that has hit the country abates.
For weeks, Nigerians have queued at empty automated teller machines and banking halls have been filled with customers barely able to get the amount of cash that they need.