The Central Bank of Nigeria (CBN) says commercial banks are to be blame for the bad naira notes in circulation.
While answering questions on Twitter about the activities of the bank on Monday, Isaac Okorafor, CBN’s spokesman, said the apex bank will announce a more permanent solution soon.
CBN had earlier reduced the cost of replacing mutilated notes for lower denominations to encourage replacement of bad notes.
For N50, N20 and N10 notes, CBN reduced the charges for replacement to N1,000 from the initial N12,000 per box.
A box contains 10,000 notes.
“Lower denomination notes have greater velocity of circulation, meaning they are frequently in use and get abused,” Okorafor said.
“Several factors account for the existence of worn out notes: The abuse mentioned above and the attitude of banks who fail to return them for reissue is another.
“To solve this problem, the CBN opened a window for banks to return N50 to N5 denominations for processing at N1000/box instead of N12,000 per box, between 2nd Jan. & 28th Mar. 2018. The waiver in processing is to encourage banks to return unfit notes for reissue.
We have enough lower denomination notes to go round. Banks have merely recirculated unfit notes because they do not want to bear the little cost of sorting the notes and bringing the unfit ones to the CBN for reissue. Very soon we will announce a more permanent solution#GrowthNG
— Isaac Okorafor (@IsaacOkorafor) February 26, 2018
“We have enough lower denomination notes to go round. Banks have merely recirculated unfit notes because they do not want to bear the little cost of sorting the notes and bringing the unfit ones to the CBN for reissue.
“Very soon we will announce a more permanent solution.”
CBN said the cost of replacement per box will be raised to N2000 after March 28.