The Central Bank of Nigeria (CBN) Wednesday cautioned commercial banks to stop from dispensing unfit naira notes either over the counter or through Automated Teller Machines (ATMs) after introduced a Clean Note Policy to put an end to the regime of mutilated naira notes.
The banking sector regulator also stressed that mutilation of notes would attract a fine of N50,000 or six months’ imprisonment. In a circular issued by the CBN, it said the initiative was in a bid to enhance the availability of clean notes and effect expeditious withdrawal of dirty notes from circulation.
Classifying banknotes into nine levels, the policy stipulated that banks must ensure that they process their banknotes using registered processing companies and classify them into fit and unfit.
The Apex bank said, Unfit banknotes shall not be re-circulated by DMBs and CPCs. However, a penal charge of N12,000 per box, or any amount determined by the management of the Bank, shall apply for the deposit of unsorted banknotes.
Accordng to CBN, a banknote would be considered unfit for recirculation if it was badly soiled or if there was a general distribution/localisation of dirt.
It added that other features that could make a note be classified as unfit were if the note presented a limp/rag appearance due to excessive folding that resulted in the breakdown of the texture and structure of the note or if the note had added image or lettering marked on it or if had a hole that was more than 10 mm.
“The CBN and DMB shall continue to receive mutilated notes from the public. The procedures for the treatment of mutilated notes and the notes for exchange are as enshrined in the Central Bank Operational Manual for the Operation of Mutilated Notes.
The ATMs shall dispense notes that have been duly checked for authenticity and fitness according to the Bank’s standard and operators whose ATMs contravene this provision shall be sanctioned according to section 20 of the CBN Act. “Similarly, DMBs and service providers whose ATMs receive or dispense counterfeits or materials other than naira banknotes shall be liable according to section 20(4) of CBN Act 2007”.