Naira Crunch: Banks In Shock As Rejection Of Old N500, N1000 Spreads
The enthusiasm that greeted the Supreme Court judgement that the old N500 and N1,000 notes should be in use till December 31st 2023, has dissipated as widespread rejection of the old notes by bank customers, transporters and other businesses took over the financial and economic space.
The rejection of the old notes is driven by continued silence of the Federal Government and the Central Bank of Nigeria, CBN, on the court judgement.
Banks Implement Cash Withdrawal Limits
Meanwhile, banks have started effecting cash withdrawal limit of N100,000 per week for individual customers.
However, the money is paid in old banknotes which most customers refused to collect.
According to a top bank official, customers are insisting that there must be an official statement approving the old N500 and N1,000 notes as legal tenders before they can accept the notes.
Speaking on condition of anonymity, the banker who heads one of the branches of a Tier 1 bank said: “Everybody (customers) that came to my branch today rejected it (old N500, N1,000 notes). They said people are not collecting it, and I tried it. I gave somebody a N1,000 note to go to a popular restaurant in Lagos to buy me rice, but the restaurant rejected it. I gave another person N500 to use it to board a commercial bus to see if transporters will accept it. The person came back and said the commercial buses refused to collect it too.
“In the case of the old N200 banknote, the President spoke and everybody adhered to it. So why are they not speaking now? They (customers) said President Mohammadu Buhari or CBN Governor should say okay to the Supreme Court ruling.
“Unfortunately that is what they are even bringing for us here. We held a meeting and they said more notes are even coming, the N1,000 and N500.”
The banker also confirmed the commencement of the cash withdrawal limit. He said: “Yes, they even said we should be doing N20,000 per customer per day. That is what the circular our banks sent to us today said.
When contacted on the above development, Acting Director, Corporate Communication Department, CBN, Dr. AbdulMumin Issa, said, “There is no official statement on the old N500 and N1,000 notes.”
The development in Lagos is also noticed in Ibadan, Oyo State capital yesterday, where bank customers said they would not take the old banknotes from their banks since the banks had earlier on Monday claimed that they were waiting for CBN or the President before they can dispense the old banknotes.
They wondered why the banks are now giving it out without the pronouncements from the two authorities.
A staff of one of the tier-one banks told our correspondent that her bank started dispensing the old banknotes because on Monday the CBN sent back the old Naira banknotes they had earlier deposited at the apex bank last week.
She hinted that she also made a personal withdrawal of N30,000, to be used for personal spendings, but regretted that she could not use it for transactions as traders and commercial motorcyclists rejected it.
“I also made a withdrawal of N30,000 old notes but unfortunately I became stranded when I wanted to pay an okada rider and he rejected it. Since that was the only money I had on me, I was also affected with the scarcity of new naira notes, I had to call someone that brought N500 for me to settle the bike man.”
She said though there is no official statement from the CBN on the acceptability of the old naira notes, following the Supreme Court judgement, there was hope that the situation would get better in few days to come.