New Naira: Sterling Bank Contravenes CBN Directive, Zenith Bank, Others Find Way To Avoid Sanction

Nigerian banks are in a dilemma due to the threat by the Central Bank of Nigeria (CBN) to sanction banks still dispensing old naira notes.

The financial regulator had warned that any bank caught dispensing old naira notes will be fined N1 million per day for not approaching the CBN to obtain new naira notes for distribution to customers. 

Recall that the central bank ordered Deposits Money Banks (DMBs) to halt the over-the-counter withdrawal of the redesigned currencies and distribute the new naira notes via their Auto Teller Machines (ATMs). 

While there are reports of insufficient new banknotes, the CBN accused the financial institutions of not coming to collect the redesigned naira notes at the apex bank. 

Despite the directive to dispense only new naira notes via the ATMs, banks continued to mix the ATM cash with old banknotes. 

In order to enforce its directive, the CBN resorted to fining the DMBs N1 million for every day the firms don’t obtain new naira notes from the financial regulator, according to the CBN’s Deputy Director in charge of Research, Osun State branch, Adeleke Adelokun, on Friday, 20 January 2023. 

Prime Business Africa gathered that the threat of N1 million fine from the central bank hasn’t stopped a firm like Sterling Bank from dispensing old notes as of Monday, 23 January 2023. 

While one of Sterling Bank’s branches at Alagbole-Akute Road, Ogun State, is still dispensing old banknotes, other creditors have adopted a measure to avoid the N1 million fine. 

During a visit to some banks located in Ogba Road, Ifako-Ijaiye local government, Lagos State, on Tuesday, 24 January 2023, Prime Business Africa observed that they didn’t load their ATMs with either new or old banknotes. 

DMBs like Zenith Bank, Guaranty Trust Bank (GTBank), Ecobank, and Fidelity Bank, all of which have about 15 ATMs combined in the branches visited, didn’t load all their ATMs. 

Customers at the ATMs lamented the situation, stating that most banks have decided to disconnect their ATMs, leaving them to depend on Point of Sale (PoS) agents, who are charging N100 per N5000 withdrawal but still handing out old naira notes.