The Central Bank of Nigeria (CBN) has taken a proactive step in ensuring the circulation of fit and high-quality naira notes within the economy by introducing the Clean Naira Notes Policy and the Banknotes Fitness Guidelines. In a memo issued by the bank and signed by the Director, Currency Operations department, Mrs. Priscilla Eleje and the Deputy Governor Operations, Folashodun Shonubi, the bank said: “As part of its statutory task for the issuance and management of legal tender currency in Nigeria, the CBN formulates and issues the Clean Note Policy.”
The statement further reads: “It ensures that Nigerian banknotes are of high quality, clean and are used with the highest conﬁdence by the general public, retailers and other cash handlers. The Clean Note Policy requires that the production, issuance of new banknotes and recirculation by the Deposit Money Banks (DMBs) as well as cash processing companies conform to the determined standards.”
The Proactive Step By The Apex Bank.
This issuance, the apex bank said, is in continuance of its mandate of ensuring the management of legal tender currency in Nigeria and also makes certain the recirculation of unsoiled, fit and high-quality banknotes in the country as imposed as obligation on the bank to maintain the quality of banknotes issued by Section 18 of the CBN Act 2007.
The policy (Clean Naira Notes Policy)articulated by the Central Bank, therefore, involves various currency management activities geared towards the efficient circulation of premium quality banknotes and also, the withdrawal of unﬁt/soiled banknotes to guarantee confidence and usage of the Naira notes as a medium of exchange by the public.
The banker’s bank will on Tuesday, April 30th, 2019, in Lagos, issue the Clean Notes policy and the Banknotes Fitness Guidelines, in a stakeholder’s engagement policy programme.
Move by CBN to collaborate with financial institutions in achieving this.
To achieve these objectives in the policy, the Bank is collaborating with Commercial Banks, Merchant Banks, Microfinance Banks, government agencies, Cash-in-Transit (CIT), Cash Processing Companies (CPCs), Market Associations, Merchants/Retailers, Chambers of Commerce and Industry, security agencies, equipment manufacturers, bank customers and the general public. The strategy will, however, remain open for future amendments in tandem with emerging currency management issues.
The Central Bank of Nigeria is self-confident to ensure the continuous circulation of banknotes that are of good quality. As such, the DMBs, other financial institutions and the general public are urged to discontinue from activities which are injurious to the naira such as writing/graffiti-ing; mutilating; stapling the naira; tearing or making holes of any kind; spraying, soiling or stepping on the notes.
The Central Bank of Nigeria Versus Money Demand And Supply.
Over the years, the growth in economic activities and the increase in population have forced the rise in the volume of banknotes in circulation. The demand for cash continues to grow despite advancement in technology.
Thus, the volume of money in circulation as at the end of 2012 rose signiﬁcantly by 10.34% to 7,914.70 billion pieces, as at mid-year of 2018, and a large percentage of the notes in circulation were dirty, mutilated, not ﬁt for ATMs and over-the-counter payments.
Now, to ensure that the banknotes in circulation are clean and of high quality, the Bank, hereby issues the Clean Note Policy.
To overcome this high demand, the CBN increases the supply of clean notes and withdraws the soiled and mutilated notes from circulation.