When a widespread rejection of the old notes by bank clients, transporters, and other enterprises took over the financial and economic landscape, the excitement that had greeted the Supreme Court's ruling that the old N500 and N1,000 notes should be in use until December 31st 2023 has subsided.
The Federal Government and the Central Bank of Nigeria, CBN, have remained silent over the court's ruling, which has led to the rejection of the old notes.
Banks have begun imposing weekly cash withdrawal caps of N100,000 for individual customers.
Nevertheless, the money is paid in obsolete banknotes which most clients declined to collect.
A senior bank official claims that clients are insistent that a formal declaration certifying the old N500 and N1,000 notes as legal money be made before the notes can be accepted.
The branch manager of a Tier 1 bank remarked, under the condition of anonymity, that "everyone (clients) that came to my branch today refused it" (old N500, N1,000 notes). I tested it, and they claimed that nobody was collecting it. I gave someone a N1,000 cash to purchase me rice at a well-known restaurant in Lagos, but the establishment turned it down. I offered someone else N500 so they could use it to board a bus for a business trip to check if transporters would accept it. The guy reported that the commercial buses also declined to pick it up when they returned.
"When it came to the previous N200 notes, the President made a statement, and everyone followed it. So why are they silent right now? Customers advised President Muhammadu Buhari or the governor of the Central Bank of Nigeria to approve the Supreme Court decision.
"Unfortunately, they are even bringing that for us to this place. They informed us at a meeting that other notes, including the N1,000 and N500, were even coming.
Also, the banker confirmed the beginning of the cash withdrawal cap. Well, they even suggested that we should charge N20,000 per consumer every day, the man replied. That was stated in the circular that our banks gave us today.
Dr. AbdulMumin Issa, acting director of the CBN's corporate communication department, responded when asked about the aforementioned development, "There is no official announcement on the old N500 and N1,000 notes."
The Lagos development was also observed yesterday in Ibadan, the capital of Oyo State, where bank customers declared they would not accept their banks' old banknotes because the banks had earlier on Monday claimed they were awaiting CBN or the President before they could do so.
They inquired why the banks are now giving it out without the announcements from the two authorities.
The CBN presents itself as a law-abiding institution by ordering banks to accept the N500 and N1000 notes in accordance with the Supreme Court's ruling. It would also assist in removing any doubt and ambiguity regarding the legal tender standing of those old naira notes.
The CBN has not indicated that it will recirculate the roughly N2 trillion of old currency already scooped up, which explains why it has retained the cash withdrawal cap, thus the cash crunch may last for some time.
The best course of action, in my opinion, is to make sure that banks have enough lower-denomination old and new notes on hand to dispense over the counter and load into their ATMs.
In response, Mr. David Adonri, Vice Chairman of Highcap Securities, remarked that it is appropriate to reinstate the old notes in order to alleviate the current painful cash shortage since the CBN has not been able to produce and issue new currency notes to replace the withdrawn ones.
"Hopefully, the old notes will be gradually withdrawn as more new notes enter circulation," he said. The economy would not have undergone the kind of disruption it is currently going through if CBN had effectively implemented the policy by supplying the equivalent quantity of new notes to replace the removed old notes.
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