The Central Bank of Nigeria (CBN) has issued a warning to Deposit Money Banks (DMBs) and authorised forex dealers, advising them against rejecting old and lower dollar denominations from customers in the country.
According to the apex bank, the directive became necessary as it had been inundated with complaints from customers after it conducted consumer market intelligence.
In a circular dated June 27, 2024 but made public by the apex bank on Monday, CBN’s Acting Director, Currency Operations Department, Solaja Olayemi, said the regulator frowned at “this selective acceptance of deposit” and that all relevant parties comply accordingly.
CBN Warns BDCs, Banks Against Rejection Of Lower Denomination Of Dollar
The CBN said all banks and authorised forex dealers “should henceforth accept both old series and lower denominations of United States Dollars (USD) that are legal tender for deposit from their customers”.
The financial regulator warned that sanctions would be meted out to any bank or authorised forex dealer that reject old series or lower denominations of the United States’ greenback from their customers.
Earlier Warnings From CBN
The CBN had issued directives in 2021, instructing forex dealers and deposit money banks to stop refusing old dollar bills and denominations.
Complaints from customers over the refusal to accept the lower notes as a means of transaction had also led to sanctions.
The apex bank also warned authorised dealers from stamping or defacing dollar bills as it would fail the authentication tests during processing and sorting.
Attempts To Curb Wobbling Naira
Mid-2023, the CBN, acting out the directive of President Bola Tinubu, announced the unification of all segments of the forex exchange market, indicating that the exchange rate will rise or fall based on the supply and demand in the market.
The reason, according to President Tinubu, was the need to “stop the bleeding of our finances”.
Despite early positive signs, the Naira would eventually breach the ₦700/$ threshold hitting over ₦1,500/$ at the moment.
To tackle this challenge, the CBN swiftly implemented a series of policy measures, one of such was targeted International Money Transfer Operators (IMTOs), removing the allowable limit of exchange rates quoted by them as well as limiting their operations to inbound transfers only
Another attempt was the revocation of licenses of Bureau De Change (BDCs) operators engaged in alleged unethical practices.
The Olayemi Cardoso administration also released guidelines aim to address the challenges faced by BDCs in the foreign exchange market, promoting a more stable and transparent financial environment.
The specific guidelines prohibit BDCs from engaging in certain activities.
These include street trading of foreign currencies; maintaining accounts or accepting assets for safekeeping/custody; and taking deposits or granting loans to the public in any currency or form.
Others are retail sale of foreign currencies to non-individuals (except for business travel allowance, international outward transfers, or off-shore business); maintaining foreign correspondent relationships with foreign establishments without prior approval; and opening or maintaining accounts with foreign banks or financial institutions without prior approval.