By Babajide Komolafe
IN apparent bid to address the rising incidence of mutilated notes across the country, the Central Bank of Nigeria, CBN, has reduced the amount of money it charges banks for sorting mutilated naira notes from clean ones to N1,000 per box from N12,000 per box.
The reduction is, however, limited to lower denomination naira notes, or polymer notes, namely N50, N20 and N10 notes. Also, the reduction to N1, 000 per box which takes effect from January 2 will last for three months till March 28, following which the charge will be raised to N2,000 per box.
A box of naira notes contains 10,000 notes, hence with the reduction, banks will now pay N1,000 as currency sorting fee for a box of N50 which contains N500,000; N1,000 for a box of N20 notes which contains N200,000; N1,000 for a box of N10 which contain N100,000; and also N1,000 for a box of N5 contains N50,000.
Meanwhile, Bank Customers Association of Nigeria (BCAN), has called on Nigerians to treat the naira properly, saying that is the solution to the rising incidence of mutilated notes in the country.
Banks are expected to return mutilated currency to the CBN for clean naira notes. Hence they are expected to sort mutilated naira notes from clean ones, before taking the mutilated notes to the CBN for replacement with new ones. However, in order to avoid the cost of machines and process for sorting the naira notes, they return the notes unsorted to the CBN. Hence, the apex bank charges banks for the cost of sorting the currency.
Confirming the reduction of the currency processing charge to Financial Vanguard, Acting Director, Corporate Communications, CBN, Okoroafor, said that the reduction was done to encourage banks to bring the mutilated notes to the CBN in exchange for new ones.
He said: “On the January 2, we wrote a circular to banks, telling them that the cost of currency processing, which stands at N12,000 per box, will be reduced from N12,000 to N1,000 between January 2 and March 28.
That is, there is window of three months. And that any bank that brings a box of lower denomination currency notes, that is N50, N20, N10, N5, those are the polymer denominations, we would process it for them at N1,000 per box instead of N12,000, because those were the ones that are more critical.
And that after March 28, the cost of sorting is still low but it will go to N2,000, instead of the original N12,000, and this is for the polymer notes. The other ones are not as critical.
“It is done to encourage banks to return these new notes so that we can issue new ones. We have enough new ones to issue to them.
Our problem is that banks have not been returning these notes because of the fear of sorting that we would charge them.
“Customers should insist that banks give them new notes because we are now giving them new notes and have reduced the cost of sorting from N12,000 to N1 per box within the window and to N2000 after March 28. So customers should insist on new notes from them. We believe that a combination of these, customer’s insistence and the large waiver we have given, I don’t see why people should not be getting those new notes.”
Meanwhile, the Bank Customers Association of Nigeria (BCAN) has said that the poor treatment of the naira is the root cause of mutilated naira notes, urging Nigerians to treat the naira properly.
Speaking to Financial Vanguard, BCAN President, Mr. Uju Ogubunka said: “The same people that get the new notes, when you see that note again, within two or three days, you won’t believe they were from the mint at the time they came out, and it is all about education, the level of awareness of our people to handle such a issue.”
“My first advice to them is that they should use the notes properly to avoid a situation of receiving bad, torn, dirty, wet, oil notes.
“The second side is, If you go to banks and they give you mutilated notes, you reject it right there, insist they change it for you. And if you are in a market place and they give you mutilated notes, you have the option of rejecting it.
But if you want to make a sale, if you are sure nobody will accept it from you, you reject it, but if you are sure somebody will take it from you, or if you take it to the banks, they will take it, you can accept it. But if nobody will accept it from you, it is as useless as a common paper.”