According to Nairametrics discovery. The Central Bank of Nigeria (CBN) has been giving commercial banks N50 notes that are faded and damaged, greatly reducing the amount of naira available to price-conscious customers.
An assortment of mangled N50 notes, purportedly provided by the apex bank, can be seen in one video that was sent to Nairametrics by a reliable source.
Commercial banks have recently come under fire for hoarding cash, diverting fresh naira bills, and reducing the country’s supply of naira bills. As a result, numerous distressing and upsetting videos—especially ones of Nigerians enduring lengthy lines and fighting in banking halls—have been making the rounds on social media.
The commercial banks have, however, also encountered severe cash shortages as a result of the apex bank’s reduced currency supply, according to Nairametrics’ research into some of the notable banks.
It was found that a bank branch received only N10 million, or 10% of the actual amount deposited, when it sent the CBN old notes worth N100 million.
Long lines at banks: Since the initial deadline of January 31, 2023, has been extended, Nigerians have faced a severe cash shortage for the past two weeks.
Depositors who laboriously deposited all of their old notes prior to the deadline in order to ensure the security of their funds were now required to stand in long lines and frequently fail to access their funds.
Others have been compelled to pay an additional 20% to 30% when withdrawing cash from POS agents, sometimes spending as much as N300.
In a related vein, Nairametrics’ research found that some fuel stations that insist on collecting cash from their customers have been selling cash to POS agents.
The financial adage “cash is king” is currently in use in Nigerian society, particularly given the unreliability of the alternative forms of payment there.
Due to the shortcomings of bank digital and mobile transactions, Nigerians have recently complained about unsuccessful debited transactions.
NIBSS Instant Payments (NIPs), which increased by 46% year over year to N38.77 trillion in January 2023, while mobile banking transactions increased by 125% to N2.37 trillion during the same period, have been blamed for the ongoing outages of banking apps over the past few weeks.
The banks’ perspective: Contrary to the widespread belief that they are hoarding naira notes, the banks have maintained that the apex bank has only provided them with a small quantity of brand-new notes.
Despite their ATMs dispensing about N25 million in cash per day, a reliable source in one of the top banks claims that the central bank has only provided an average of N1 million per week since the start of the year.
He claimed that last week they deposited N100 million to the apex bank but only received N10 million, or only 10% of the amount deposited, in a similar conversation with another banker in one of the tier-two banks. He said, “I wonder how banks are going to meet the insatiable demands on Nigerians for cash when only 10% of deposits are returned to banks.
I wonder how banks will be able to satisfy Nigerians’ insatiable demand for cash,” he said.
Normally, a bundle of cash would be equivalent to N500,000 in N1,000 notes, but it is now worth N25,000 in N50 notes. This restricts how much money banks can put on their ATMs at once, which in turn limits the amount available to depositors.
The apex bank’s naira redesign policy was intended to lessen the amount of currency that was not kept in bank vaults, which as of December 2022 had increased to over 85% of all currency in circulation.
The CBN governor, Godwin Emefiele, provided updates that showed, however, that the amount of money outside the banking system had decreased from N2.5 trillion to N900 billion in January 2023. It is believed that a reduction in the amount of excess liquidity will help to lower the inflation rate.
