Panic Withdrawal: CBN Says Old, New Naira Notes Remain Legal Tender

By Modupe Gbadeyanka

The Central Bank of Nigeria (CBN) has urged residents of the country not to withdraw their funds in Deposit Money Banks (DMBs) in a panic over fears that the old currency notes may be rejected next year.

In October 2022, the central bank under the former Governor, Mr Godwin Emefiele, introduced a Naira redesign policy, which changed the N200, N500, and N1,000 currency notes.

Nigerians were given the deadline to swap their old notes to the new ones earlier this year, but some state governors dragged the federal government to court, securing the judgment of the Supreme Court to extend the deadline to December 31, 2023.

As this deadline approaches, there are concerns that the old notes may no longer be legal tender from next year, resulting in panic withdrawal and cash scarcity since last week.

The CBN earlier calmed nerves, assuring that it has enough cash to sustain the economy and avoid a cash crunch crisis witnessed in the country ahead of the February 2023 general elections.

Again, in a statement on Wednesday, the apex bank emphasised that the old and new notes remain legal tender, appealing to Nigerians to remain calm.

In the notice signed by the Director of Corporate Communications at CBN, Mr Isa AbdulMumin, it was affirmed that, “There is sufficient stock of currency notes to facilitate normal economic activities.”

“Furthermore, to reduce the pressure on the use of physical cash, members of the public are again advised to continue to embrace alternative modes of payment,” the bank further stated.

“For the avoidance of doubt, while reiterating that there are sufficient banknotes across the country for all normal economic activity, we wish to state unambiguously that every banknote issued by the Central Bank of Nigeria remains legal tender and should not be rejected by anyone, as stipulated in Section 20(5) of the CBN Act, 2007.

“Accordingly, branches of the CBN across the country have been directed to continue to issue different denominations of old and redesigned banknotes in adequate quantities to Deposit Money Banks for onward circulation to bank customers.

“We wish to restate that all denominations of banknotes issued by the CBN remain legal tender. In line with Section 20(5) of the CBN Act, 2007,” the statement averred, warning that, “No one should refuse to accept the Naira as a means of payment.”