CBN Directs Banks To Accept Old Naira Notes Until December 2023

Summary:

• The Central Bank of Nigeria (CBN) has directed that old N200, N500, and N1,000 notes remain legal tender until December 31, 2023, in compliance with the Supreme Court’s ruling on March 3, 2023.
• The apex bank also directed deposit money banks in Nigeria to comply with the order, and all concerned parties are urged to conform accordingly.
• The court’s decision followed a lawsuit filed by 16 states challenging the legality of the policy.

The Central Bank of Nigeria (CBN) announced on Monday that the old N200, N500, and N1,000 banknotes will remain legal tender until December 31, 2023, in compliance with the Supreme Court ruling of March 3, 2023.

The apex bank’s Acting Director of Corporate Communications, Isa AbdulMumin, issued a statement directing Deposit Money Banks operating in Nigeria to comply with the court order.

He also emphasized the CBN’s adherence to the rule of law principle and obedience to court orders, which characterizes the government of President Muhammadu Buhari.

The announcement followed a suit challenging the legality of the introduction of the cashless policy, which was instituted by 16 states of the federation.

The Supreme Court had on March 3 directed that the old banknotes remain valid till December 31, 2023. As a result, the CBN held a meeting with the Bankers’ Committee and directed that the old banknotes remain legal tender alongside the redesigned banknotes until the expiration of the deadline.

This move will likely ease concerns about the cash shortage that occurred after the apex bank introduced the cashless policy in January 2022, which banned depositors from withdrawing or depositing cash above N500,000 for individuals and N3,000,000 for corporate bodies.

The policy aimed to promote cashless transactions and reduce the circulation of fake banknotes.

However, the cash scarcity sparked protests and legal action from various groups, including labour unions, small businesses, and traders, who claimed that the policy negatively affected their operations.

The CBN’s decision to comply with the Supreme Court ruling will provide temporary relief for these groups and other citizens who rely on cash transactions.