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FG bans old 1000 and 500 naira notes

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By Mercy Kelani

The CIBN debunks rumor concerning the Nigerian banking industry.

The Chartered Institute of Bankers of Nigeria (CIBN) asserted that the banking industry in Nigeria is not under severe stress. The rumor of the Nigerian banking industry being under severe stress is generated from the current crisis challenging the country’s financial sector as a result of the naira redesign policy. According to the CIBN, the banking industry is resilient, focused and committed to offering solutions to challenges in the sector that grew from Nigerians’ contention with cash crunch.

President of CIBN, Dr. Ken Opara, in a statement on February 13, 2023, affirmed the industry’s commitment to enforce normalcy in the banking system. A week ago, there was a rumor of the Central Bank of Nigeria (CBN) working towards stopping the operations of some commercial banks. This rumor caused panic for depositors until a disclaimer was issued by the Supreme Court of Nigeria. The president debunked the rumor of the apex bank’s incapacity to print and circulate the new naira notes.

Furious citizens attacked banks and vandalized ATMs.

While the Chartered Institute of Bankers of Nigeria (CIBN) debunked the rumor of shortage of printing materials for the new naira notes, the Nigerian Security Printing and Minting (NSPM) Company also falsified the story, regarding it as baseless and misleading. NSPM assured Nigerians of the effective arrangement it has made to relentlessly print redesigned naira notes and other denominations that do not fall under the naira redesign policy. The public is therefore required to disregard rumors concerning the banking industry.

The industry has been said to be working tirelessly to debunk rumors and show commitment to the public. The enforcement of the naira swap policy has caused rivalry between banks and a good number of citizens owing to the CBN’s allegation of banks refusing to dispense the new naira notes. The inability to receive cash after depositing old naira notes in the bank caused desperation in the public and has made furious citizens attack some banks, vandalizing ATMs.

Kaduna, Kogi and Zamfara States sued the CBN to court.

Additionally, an emergency meeting prompted by the public outcry was held by CBN Governor, Godwin Emefiele and President Muhammadu Buhari. The result of the meeting moved the earlier sanctioned January 31 deadline to February 10 for expiration of old naira notes. Varieties of public responses accompanied the naira swap policy with inclusion of the CBN’s plan to shut down some banks. A week before, Kaduna, Kogi and Zamfara States sued the Central Bank of Nigeria to court with a request that it readjusts its policy, allowing both the old and new naira notes to be legal tender.

Following the lawsuit, the Supreme Court issued an Ex Parte order to stop the CBN from enforcing its deadline of February 10. However, the apex bank stuck by its own rule, disregarding the apex court’s ruling. The CBN Governor, on February 14, stated that given the improvement of the situation, there is no need to adjust the deadline. The implementation of over-the-counter payments to replace ATM disbursements has brought about a significant calm to the situation.

FG disregarded the ruling of the Supreme Court.

Godwin Emefiele, during a visit to the Ministry of Foreign Affairs for a discussion concerning the monetary and redesign policy, affirmed that the CBN would not be considering an adjustment of the February 10 deadline. Contrary to the ruling of the Supreme Court – which restricted the Federal Government and the Central Bank of Nigeria (CBN) from banning the old naira notes – President Muhammadu Buhari, in a national broadcast, ordered that the old 1000 and 500 notes cease to be legal tender.

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