CBN Threatens Nigerian Banks With 400% Penalty For Circulation Of Mutilated Banknotes

The Central Bank of Nigeria (CBN) has cautioned all Deposit Money Banks (DMBs) against the acts of circulating composed banknotes that are part of their deposits to the apex bank.

BrandNewsDay Nigeria reports that the CBN’s warning, which was signed by the apex bank’s Director was made available in a circular titled, ‘Treatment of Composed Banknotes’, issued to all deposit money banks on March 31, 2022.

The CBN has expressed concerns over the increasing number of these composed banknotes which the members of the public usually request for their replacement.

The CBN’s Director Umar, in the circular said that the existence of such banknotes in the economy falsifies the true value of the currency in circulation and could also be a venue for fraudulent activities.

In its efforts to end the circulation of bad and mutilated currency, the apex bank has been at the forefront of the fight to end distribution of composed banknotes in the financial system.

Recall that the CBN, in February 2022 said that about 100 tonnes of bad naira notes were generated as waste and destroyed weekly through open-air burning at its 12 disposal centres across the country.

CBN Threatens Nigerian Banks With 400% Penalty For Circulation Of Mutilated Banknotes