Over-the-counter withdrawal of new notes prohibited by CBN

8 min

Nigeria new currency notes of N1000, N5000 & N200.
An image of Nigeria CBN Governor, Godwin Emefiele with the Nigerian new notes in the background.

Deposit Money Banks are not supposed to reimburse consumers who withdraw new naira notes over the counter, according to a directive from the Central Bank of Nigeria.

To guarantee that the money circulates across the country prior to the deadline of January 31, 2023, when the old notes will no longer be accepted as legal tender, the central bank instead instructed the banks to fill their Automated Teller Machines with exclusively new notes.

According to information obtained by Saturday PUNCH, the apex bank sent the banks the direction on Wednesday and required that implementation start right away.

The banks protested that there wasn’t enough of the new notes available, so they loaded their ATMs with the old ones as of Friday, failing to comply with the instruction.

According to a source in a Tier-1 bank who told one of our reporters about the CBN instruction on Thursday, her lender sent a note to all the branch managers on Thursday directing them to enforce the CBN order.

“The CBN has required that we immediately suspend the Over-the-Counter payment of the new N200, N500, and N,1000 money,” said the message, which was headlined “Urgent update on currency redesign” and signed by the Group Head, Retail Operation. All fresh currency should be loaded into the ATMs for user withdrawals instead.

“Please accept this quickly.

However, the manager of one of the bank’s branches in Ikeja, Lagos, who provided the information, claimed that the new notes were hard to come by. As a result, the branch chose to stock the ATMs with a mix of the old and new N1,000 and N500 notes for users to withdraw.

According to the source, “We received a communication from head office this morning (Thursday) saying we should stop issuing new notes to customers who come to withdraw over the counter, but instead we should load the ATMs with the new notes. According to the email from the head office, the directive was issued by the CBN, and we needed to put it into effect right away.

However, the instruction has put us in a difficult situation because we are running low on supplies.However, the manager of one of the bank’s branches in Ikeja, Lagos, said that the new notes were in short supply. As a result, the branch decided to load a mixture of the old and new N1,000 and N500 notes of the new notes because there had been a significant increase in the number of people using the ATMs to withdraw money following the Christmas holidays.

The banks are in charge of loading the ATMs. Only one denomination of the new notes passed the test of dispensing effortlessly through our ATMs when our bank tested the equipment. The bank is modifying the ATMs so that they can dispense the new notes. The few fresh N1,000 and N500 notes that are available in my branch have been mixed with the older notes so that desperate customers can withdraw money and take care of their immediate necessities.

You might have noticed that many ATMs were inactive over the Christmas and New Year’s holidays. The intention was not to distribute outdated notes, but regrettably, the new ones are not currently in use. The CBN has mandated that the banks transfer N1 billion in old notes to it each day, and our head office has established a stringent vault limit or cash holding limit for each branch that we are not allowed to go above.

Osita Nwanisobi, the CBN spokesperson, did not react to questions from Saturday PUNCH when contacted. He stopped speaking as soon as one of our correspondents introduced himself and the subject. Calls to his mobile number after that were not answered. He didn’t respond to text messages or WhatsApp messages sent to his phone.

However, a top CBN official who talked to Saturday PUNCH under the condition of anonymity because he was not authorised to discuss the matter acknowledged that the apex bank had in fact given the banks the directive.

He explained, “From this weekend, new notes will be available for disbursement to bank customers. We are pushing the N1,000 and N500 notes through the ATMs for now. The N200 will be available later.

“The aim is to check inflation and currency abuse. A research was conducted and it showed that the demand for the N1,000 and N500 is higher, hence the decision to start with them.”

When asked when the agent banking representatives, who dispense cash to customers through Point of Sale terminals, would have the new notes, he said the objective of setting them up was not to handle large volume transactions, adding that the operators were abusing the guideline.

A source in the corporate affairs department of a new generation bank told Saturday PUNCH, “Even before the CBN directive, our bank had been loading the ATMs with new notes. However, I must admit that the new notes are in short supply. What we do is to mix them up with old notes. For example, if you want to withdraw N10,000, you may get only two pieces of new N1,000. Some of our ATMs in the Oniru area of Victoria Island, Lagos, are dispensing only new notes.

“The configuration of the ATMs is an ongoing thing; yes, all the ATMs have not been fully configured. There are gaps from the regulator, which is the CBN, but we will obey the directive within the limit of what we have. Customers are depositing old notes in huge volumes. The CBN has stopped the supply of the notes that will soon cease to be legal tenders to the banks.

“I am sure that before January 31, the new notes would have spread to different parts of the country. Though I work in a bank, I have not seen the new N200; I have only seen N500 at a party in Abeokuta and it was being sold as your paper rightly reported a few weeks back.”

 Old notes

When Saturday PUNCH conducted surveys across many bank branches and ATM galleries on Friday to find out if the CBN directive had been complied with, it was discovered that the majority of them were still dispensing to their customers old notes that would go out of circulation by month end.

At the Ibafo, Ogun State branch of the UBA, it was observed that the ATMs were dispensing only old N1,000 and N500 notes to customers, who lined up in a queue at the gallery. When one of our correspondents asked the security guard on duty at the gallery when new notes would be loaded onto the ATMs, he said arrangements were being made for that and that the new notes should be available two hours from then. That was around 12.15pm. A subsequent visit to the bank’s ATM gallery around 2.30pm revealed that one of the machines had been loaded with the new N1,000 notes, but customers were limited to withdraw only N10,000.

At the nearby Access Bank branch, only one ATM was working at the gallery as it only dispensed the old N1,000 notes.

At the UBA Akute business office in Ogun State, one of our correspondents observed that the ATMs were dispensing new notes, but old notes were being paid to customers who made over-the-counter withdrawals.

The First Bank ATMs in Mowe were dispensing old notes as of Friday afternoon and when one of our correspondents approached the cashier inside the banking hall for new notes, she was told that it was not possible as the branch only got small amounts of the new notes and was mixing it with old notes.

Over the counter, customers were being given old notes, but the cashier said the new notes should be in circulation by the end of the month. When our correspondent returned to the ATM gallery, she withdrew N5,000 in old N500 notes.

PoS operators in Magboro said that they did not have new notes to give to their customers, adding that in a bale of N100,000 they get from the bank, they get only N1,000 new notes.

At the Ecobank branch inside the Mountain of Fire and Miracles’ Prayer City, Magboro, Ogun State, the ATMs were not dispensing new notes and customers were also being paid old notes over the counter. A teller said the branch did not have new notes to dispense to customers.

The Access Bank and Wema Bank ATMs in Arepo were also dispensing old notes.

At the GTbank, Mushin, Lagos, the ATMs were still dispensing old notes, while over-the-counter withdrawals were also in old notes. The same situation was recorded at the bank’s branch in Anthony Village.

Branches of Access Bank and First Bank at Nyanya in Abuja were still dispensing old notes as of 2pm on Friday.

At Access Bank, CMD Road, Magodo, Lagos, the old naira notes were being dispensed by the ATMs and inside the banking halls.

One of our correspondents observed that some customers, who insisted on new notes, were told to return on Monday or wait till the bullion van bringing the notes from the ‘store’ arrives later on Friday evening.

An aggrieved customer, Ayotunde Disu, who claimed to have been affected by the situation, said he had been lied to by the tellers for far too long.

Disu said, “I am a PoS operator. They know me here. They promised to give us some level of concession but they have been posting me. I came here on December 30, 2022, and they promised that they would attend to me on January 4, 2023, when they resumed

I came here on January 4 and I was shocked when they gave me very dirty notes. I rejected them and protested, and they told me to come back today (Friday). Look at it now. They are telling me to hold on till Monday. I won’t.

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“My own problem is that I don’t want to have any old notes with me by the time the deadline is over, which is January 31, 2023.”

Another customer at the banking hall, who did not want to be named, said he was shocked when the teller gave him old notes when he came to cash a cheque.

“I don’t bank here but I came to cash a cheque. They are giving me old notes, which are very dirty. They look like they were taken out of a dungeon. Of course, I rejected them,” he said.

A teller at the counter said the new notes had been exhausted.

“They gave us some new notes as we resumed this year, but I have to be honest with you; they have finished. I cannot have the new notes and do not want to give you, please,” she said.

Another teller, who begged not to be named, asked our correspondent to come back on Monday, promising to give him the new notes.

“I am not promising that everything will be new notes, but I will try and squeeze out more than the approved 10 per cent per N100,000 for you,” he said.

At the Keystone Bank branch on CMD Road, the situation was even worse as no new note was disbursed over the counter. The tellers claimed to have all exhausted the ones given to them for the week.

“They gave us some stacks as we resumed this year, but we have exhausted them. This morning, I still had some, but a PoS operator came and took everything,” one of the tellers claimed.

A customer in the banking hall, Hadiza Ahmed, said he had not laid her hands on the new notes since they were released last year.

“I don’t know if this January 31 deadline is feasible because I haven’t even touched the new naira notes since they were released,” she added.

At Access Bank, Obalende, the tellers mixed the new naira notes with very old and dirty old notes for customers.

One of our correspondents observed that for N50,000 withdrawal, N5,000 worth of new notes were added. For N100,000, N10,000 was given.

Many customers who were disgruntled by this and protested to have their notes changed were asked to come back on Monday.

“The tellers said we should come back on Monday. My own fear is that I don’t want to collect these old notes and forget to spend them and they become invalid in my hands,” a customer stated.

At the First Bank main branch on Bonny Island, Rivers State, old notes were still being dispensed as of Friday.

A trader, Comfort Adindu, who visited the branch for an over-the-counter withdrawal, was paid with old notes.

Adindu said, “At Bonny Island, I am not sure these new notes have been brought except for those who brought them from Port Harcourt.

“I have gone to many banks and they are still giving out old notes.”

A student, Wisdom Ahamefuna, who visited the UBA, King Perekule Road branch, Bonny, said the tellers mixed a few new notes with the old notes at the counter.

The ATMs are still dispensing old notes. It is as though the money has been kept for long,” he added.

A senior bank official at Access Bank, who begged for anonymity because he was not permitted to speak on the matter, said it was not the fault of the banks but that of the CBN.

The bank representative responded, “We have to ration the new notes to all of our customers because the CBN is giving us too little of the new notes you are talking about. Nothing that we can do will help.

“It is clear that the deadline of January 31 is not realistic, but we are awaiting the CBN’s decision. Many of our consumers are dissatisfied. One even came here to fight us, but we are unable to stop them.

“Our director of currency operations arrived last week with just 14 stacks totaling N100,000 in fresh notes. How many customers can that accommodate?

Overwhelmed at CBN: Economist

Mr. Ade Dayo, an economist, claimed that the central bank appeared overburdened because it was clear that it would not be able to make the January 31 deadline.

“The CBN policy is good, but the time span is too short,” said Dayo. The updated notes should have been dispersed by now. The CBN must increase its sensitization efforts. There does not appear to be much awareness of the new naira or what it looks like, and it is not a good one.

If people in Lagos and other megacities, like Port Harcourt, are having issues receiving the new notes, what will happen to rural communities who do not even have access to banking?

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