- The Central Bank of Nigeria (CBN) said the old N200, N500, and N1,000 notes remain legal tender indefinitely
- In a statement, the apex bank said it is working with relevant agencies to stop the Supreme Court order that gave the deadline
- The move by CBN comes as financial analysts expressed concern over the legality of CBN directives
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Central Bank of Nigeria (CBN) announced on Monday, November 13, 2023, that it had reversed the December deadline for the withdrawal of old naira notes from circulation.
The declaration meant old N200, N500, and N1,000 notes will remain legal tender alongside the newly redesigned notes until their gradual fade out from circulation.
However, some financial experts have said that the CBN order contravened the Supreme Court directive, which gave the order to phase out the old notes by December 2023.
Kelechi Mgboji, financial analyst and journalist, said the Supreme Court order supersedes CBN's directive, stating that the apex bank cannot restore the old notes against the apex court ruling.
"What CBN should have done first is to secure the vacation of the order. They had the time to do that when they realized they would allow the old notes to circulate ad infinitum. It is the case of putting the cart before the horse."
Pius Ojo, a banker with one of the old-generation banks, stated there is no difference from what CBN did.
"I do not think there is a clash between the two apex bodies as long as they work together to achieve the same goal."
But Mgboji believes that CBN will be in contempt if it goes ahead to circulate the old notes.
"The Supreme Court is the final arbiter on any matter. I wonder if it can overrule itself. Working in harmony is key.."
CBN to vacate Supreme Court order on old naira notes
The apex bank revealed in the circular that it is working with relevant bodies to vacate the court order that gave the December deadline for the validity of old notes.
“Thus, all banknotes issued by the CBN, by Section 20(5) of the CBN Act 2007, will continue to remain legal tender, ad infinitum, even beyond the initial December 31, 2023, deadline.”
The bank’s Director of Corporate Communications, Isa AbdulMumin, revealed this in a statement on Tuesday, November 14, 2023.
The apex bank revealed that its decision aligns with international best practices and to preempt a repeat of earlier experiences.
The new announcement comes amid panic withdrawals by bank customers who had begun hoarding cash in anticipation of the December deadline when the old naira notes were supposed to stop circulation.
Banks reimpose cash withdrawal limits amid panic withdrawal
The move reportedly led to commercial banks imposing cash withdrawal limits to forestall cash scarcity ahead of Christmas.
Cash scarcity returns in parts of Nigeria
The latest development comes amid the reported return of cash scarcity in parts of Nigeria where Point of Sale (PoS) operators resort to sourcing funds from petrol stations and elsewhere.
Residents across Nigeria feared that naira scarcity may have returned as they found it challenging to get cash for their day-to-day transactions.
Some banks across the country have also limited cash withdrawals, according to findings, worsening the situation.
Legit.ng had earlier reported that some parts of the country were reportedly experiencing cash scarcity.
Meanwhile, the CBN, in a recent report, assured Nigerians of enough availability of cash across Nigeria.
CBN releases names of 10 digital banks licenced to operate as MFBs, issue PoS services
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Earlier, Legit.ng reported that Digital banking is gaining roots in Nigeria as operators employ the best technological tools to solve Nigerians' transaction challenges and deploy tech-savvy personnel.
To deepen financial inclusion, the CBN approved licencing digital payment platforms to operate microfinance banking and Point of Sale (PoS) services in Nigeria.
Despite being confined to digital spaces, these platforms are ubiquitous and have recently solved myriads of financial problems for Nigerians.