Victor EzejaThe Central Bank of Nigeria (CBN) has warned licensed forex dealers and Deposit Money Banks (DMBs) against rejecting older and smaller denominations of US dollars.
The apex bank stated that they are mandated to be accepting them from customers.
Join our WhatsApp ChannelThe bank gave the directive through a circular released on Monday, dated 27 June 2024, signed by the CBN’s Acting Director of Currency Operations Department, Solaja Mohammed Olayemi.
It said this decision was prompted by consumer market intelligence studies that showed financial institutions and forex dealers were consistently rejecting certain bills on a selective basis.
The new circular referenced an earlier directive of the CBN with, COD/DIR/INT/CIR/001/002, issued on 9th April 2021, which explicitly prohibited the selective acceptance of deposits and required all relevant parties to fully comply. It said the circular is still in force.
The new circular reads: The outcome of the consumer market intelligence conducted by the Bank revealed the continued rejection of old/lower denominations of United States (US) Dollar bills by Deposit Money Banks (DMBS) and other authorized forex dealers.
“Kindly be reminded that the Central Bank of Nigeria (CBN) circular referenced COD/DIR/INT/CIR/001/002 and dated 9th April 2021 which explicitly frowned at this selective acceptance of deposit is still in force and must be adhered to and complied with by all relevant parties.”
The CBN also warned all authorized forex dealers to desist from any act that defaces dollar notes.
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“For the avoidance of doubt and further guidance on the circular, the content is hereby reissued as follows for strict compliance:
“1. All DMBs authorized forex dealers should henceforth accept both old series and lower denominations of United States Dollars (USD) that are legal tender for deposit from their customers.
“2. The CBN will not hesitate to sanction any DMB or authorized forex dealers who refuse to accept old series/lower denominations of US Dollar bills from customers.
“3. In addition, all authorized forex dealers are advised to desist from defacing/stamping US Dollar Banknotes as such notes always fail authentication test during processing/sorting,” the bank added.
This directive comes days after the CBN issued fresh guidelines urging commercial banks to deposit excess dollar cash with them.
The apex bank has been making frantic efforts to boost liquidity in the foreign exchange market.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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