By Babajide Komolafe
NATIONAL identities are symbols of self determination, commonality and unity. One of such symbols is the national currency. Among other things, the national currency, according to Benjamin Anderson, a foreign affairs analyst, “is the ambassador of the country and the culture it represents”.
Thus governments across the world devote ample effort and resources to ensure that their national currency commands economic value and are also handled with respect.
While the monetary authorities are solely responsible for issuing national currency as well as preserving its value through foreign exchange management practices, the preservation of the quality of currency in circulation is joint responsibility of the government and the citizens.
Thus efforts to ensure the quality of currency notes of any country cannot be successful without the commitment of its citizens especially members of the banking public who are also critical stakeholders in the currency management ecosystem.
The above informed the Clean Naira Notes Policy and Banknote fitness Guidelines introduced by the Central Bank of Nigeria (CBN) last week.
“The effective use of these documents by relevant stakeholders would ensure that banknotes in circulation are clean and of high quality. Characteristics that are key to sustaining public confidence in the National currency”, said Mr. Godwin Emefiele while speaking at the unveiling ceremony in Lagos.
Clean notes in circulation
Represented by Mr. Ade Shonubi, Deputy Governor, Operations CBN, Emefiele stressed the collective responsibility of Nigerians towards the naira as a national identity. He said: “The responsibility for clean notes in circulation is not exclusively that of the central bank, rather a collaborative effort between the central bank, banknote suppliers, deposit money banks (DMBs), manufacturers of currency management equipment, currency transportation and processing companies, security agencies, and the general public”.
Consequently, “I will like to seize this opportunity to urge Nigerians to handle the Naira banknotes properly; as it is a criminal offence to abuse the Naira. Moreover, the Naira is our identity as a country, so we need to respect it.”
Thus the unveiling of the Clean Naira Note Policy and the Banknote Fitness Guidelines represents fresh efforts to reawaken in Nigerians a sense of collective responsibility towards ensuring the fitness and cleanliness of naira notes in circulation.
According the CBN, “The Clean Note Policy provides a uniform standard for circulation of only clean and fit notes; while the Banknote Fitness Guidelines provide the industry with clear and acceptable criteria for determining the quality of bank notes in circulation.”
The Clean Naira Note Policy
The policy among other things defines what constitutes an unfit and mutilated banknote and standards for recirculation of mutilated notes.
An unfit banknote, according to the policy, “refers to a genuine banknote that is no longer fit for circulation in accordance with the quality standard set by the CBN
The policy stated: “A banknote shall be considered unfit for recirculation when: It is badly soiled or there is a general distribution/localisation of dirt; It presents a limp/rag appearance due to excessive folding that results in the breakdown of the texture and structure of the note; It has added image or lettering marked on it. There is a hole that is more than 10 mm; and other defects detected by the approved processing systems.”
The policy also defines a mutilated banknote saying, “A currency note shall be considered mutilated when: Torn parts of the banknote are re-joined with adhesive tape in a manner which tries to preserve as nearly as possible the original design and size of the note; The original size of the note has been reduced/lost through wear/tear or has been damaged by fire, rodents, insects, chemicals, defaced or perforated through other causes; It is scorched or burnt to such an extent that although recognisable as such, it has become frail and brittle as to render further handling impossible; and more than half of the original size of the banknote is missing.
“The financial institutions and the general public are advised to refer to the Central Bank of Nigeria Banknote Fitness Guidelines to acquaint themselves on visual representation of unfit banknotes.”
Abuse of the Naira
The Clean Note policy also spells out what constitute abuse of the naira. It stated that:“The DMBs, other financial institutions and the general public shall desist from the following acts which are injurious to the Naira: Writing/Graffiti, Mutilating, Stapling the Naira, Tearing or making hole of any kind. Spraying, soiling or matching. Offenders shall be liable to a fine of fifty thousand Naira or six months imprisonment or both under the provision of Section 21 of the CBN Act, 2007”.
To achieve the objectives of the Clean Naira note policy, the CBN said it would conduct periodic public sensitisation campaign to: Enlighten the public and other cash users on proper handling of the Naira banknotes; Promote and maintain public confidence in the legal tender currency; Stop the practice of re-circulating dirty notes by DMBs as it contributes to the poor quality of notes in circulation; Educate the public on the basic security features of the banknotes so as to distinguish genuine notes from counterfeits; Underscore the importance of the currency as a symbol of national unity and heritage; Conduct training for security agencies and cash handlers using educational materials such as digital tools, instructional CD-ROM etc; Sustain the campaign against the abuse of the Naira; and also establish mutual partnerships with the deposit money banks, cash handlers, security agencies and the public as stakeholders in currency management.
Role of DMBs and CPCs
The Clean Naira Note policy also spells out the responsibilities of Deposit Money Banks (DMBs) and Cash Processing Companies (CPCs) with respect to recirculation of banknotes.
It stated that: “To ensure that the banknotes in circulation are clean and of good quality, DMBs shall ensure that they process their banknotes using registered processing companies and classify them into ût and unût.
“Any counterfeit notes discovered are to be returned to CBN. Only the banknotes which have been authenticated (i.e. veriûed free from counterfeit and unût notes according to CBN standard) will be issued over the counter by banks or through their cash dispensing machines.
“Unût 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. In addition, penalties as may be determined by the Bank, shall apply for the recirculation of unût banknotes.
“There are machines that accept, count or sort banknotes automatically into ût, unût, suspect or counterfeit. Only cash processing machines which have been duly conûgured, and approved by the Bank shall be used by CPCs. The CBN shall set ûtness standards/parameters for the processing machines by using test packs which may be changed periodically. The test packs shall serve as the reference notes and may be reviewed from time to time. Against this background, the CBN on a regular basis shall monitor compliance as set therein.
Speaking at the unveiling of the documents, Director, Currency Operations, CBN, Mrs. Priscilla Eleje said that the CBN has developed a mechanism to ensure full compliance with the documents by stakeholders adding that complaint channels such as phone and emails would be provided to enable the general public provide information on infractions of the two documents.
She said that CBN staff will visit banks’ branches to monitor compliance adding that any bank that issue counterfeit naira notes will be fined N1 million. She however said that the spot examination by CBN staff will be preceded by publicity through banner and poster display in banking halls across the country to ensure adequate sensitization of bank customers.
Mutilated naira note mop up
Disclosing that the CBN is working on a plan to mop up all the mutilated notes in circulation across the country, Eleje said: “We are coming out very soon with a policy, a plan, a programme for us to withdraw mutilated notes from circulation. Once we are done with that, we will give a time frame within which banks will bring all those terrible notes, over-circulated notes, in your vaults. In view of this she urged banks not to reject mutilated notes from their customers but collect them so as to bring them to the CBN when it starts mopping up mutilated notes. She said: “Please don’t reject the mutilated notes when you customers give them to you. We will try and do it in a way that you will be happy to give them to us. The details we will pass up to the banks later. We will encourage you to bring them (the old notes), that is a promise.”