The Senate on Wednesday unanimously asked the Central Bank of Nigeria (CBN) to extend the deadline of the controversial deadline for phasing out the old naira notes to June 30, 2023.
Both the Senate and the House of Representatives had expressed concern over the decision of the CBN to fix the deadline for the return of old currency to January 31, 2023, following the redesigning of the N200, N500 and N1,000 banknotes.
But in a fresh hearing on the matter, Senator Ali Ndume, APC, Borno South, who had moved a motion titled: “Urgent need to extend the withdrawal of old currency from circulation,” faulted the timing of the policy. He said the new naira notes have failed to meet the needed degree of circulation in urban areas, not to talk of rural areas.
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The impact of the redesigned naira notes on SMEs, particularly in rural areas, has been at the center of the argument that its deadline needs to be extended. But the CBN had last month assured the public that it has put measures in place to help businesses and people in rural areas to meet the deadline.
Ndume said the stipulated deadline of January 31, 2023 is short, given that banks have since 15th Dec. opened their vaults to customers and depositors and are yet to push enough of the redesigned notes into circulation.
“Aware that Some Nigerians are already envisaging rush and long queues in the banking hall across the country as a result of people trying to get access to the new naira note, which was unveiled last month by President Mohammad Buhari at a brief ceremony at the state house, Abuja.
“Aware also that the old notes are expected to be in circulation alongside the new ones until January 31, 2023, when the old notes are expected to be phased out, it is expected that many Nigerian businesses would start to reject the old notes as soon as the banks start paying out the redesigned notes to customers.
“Observes that access to the new notes may be compounded by the recent circular by the CBN, which limits the amount of cash individuals and corporate entities could withdraw within a certain period of time.
“For instance, the CBN said individuals could only withdraw N100, 000 per week while corporate could only have access to N500, 000 per week through over-the-counter (OTC) transactions.
“Observes that access to large quantities of cash above the limit would attract processing fees of 5 per cent and 10 per cent for individuals and corporate entities respectively.
“Large withdrawals are also subjected to scrutiny by the regulator to determine the importance and usage of such cash; and convinced that if the withdrawal of old notes from circulation is not extended beyond 31st January many Nigerian will be thrown into hardship and to avoid a repeat of 1984 experience withdrawal of old notes,” Ndume said.
But the CBN had earlier this month, announced adjustment in its naira withdrawal policy that has equally stirred criticism.
In an updated circular dated December 21, 2022, and addressed to all regulated financial institutions, the apex bank adjusted over the counter and ATM bank withdrawal limits, originally fixed at N100,000, per week for individuals and N500,000 per week for corporate organization to N500,000 and N5 million respectively. The CBN said the upward review was carried out following the feedback it received from stakeholders.
The upward review of the withdrawal limit policy has been expected to help the banks to successfully meet the deadline set by the CBN to phase out the old naira notes.