The CBN during the week blamed commercial banks in the country for sabotaging its efforts in replacing mutilated notes with new currency notes.
The CBN Acting Director Of Communication, Mr. Isaac Okorafor made the allegation on Thursday in an interview in Lagos and while reacting to lamentations from Nigerians on the high level of mutilated notes in the country.
Mr. Okorafor mentioned that the Apex bank is aware of the problem and has been taken steps to ensure new currency notes are available in circulation. According to him, “one of the step the CBN has taken in mopping the mutilated notes in the country was reducing the amount it charged banks for replacing the dirty notes for new ones from N12,000 to N1,000 per box.
The charge reduction which affected only the 10, 20 and 50 Naira notes was for a 3 months period and it ended on March 28, it was later reviewed to N2,000 after the 3 months window closed.
According to Mr. Okorafor CBN has resort to adoption another option of withdrawing the mutilated note by approaching market traders and encouraging them to change genuine note to new currency notes and that this will not attract any cost to the traders.
He however hinted that the serial numbers of the new notes exchanged with the trader will be used to trace any member of the public who hoard and sell the new currency notes.”
In as much as it can be argued that commercial banks is buoyant enough to be able to pay the cost for sorting and replacing old notes. Banks are private businesses that will resist any attempt to increase their cost lines except if it is compulsory and may lead to sanctions if not obeyed.
the Apex bank option of approaching traders in markets and exchanging their old notes to new ones may not be a desirable option as traders are also in the business of taking advantage of business opportunities. CBN May be planning to open another business ventures for these traders unknowingly as monitoring serial numbers of new notes in circulation may be a bit challenging in a sub organized environment like Nigeria.
To really get the mutilated notes out of circulation, the Apex bank should make it compulsory for commercial banks to send in the bad note through its oversight functions and charge them for the cost while also sanctioning defaulting banks.
In the alternative, if the Apex bank can afford to change the mutilated notes for new ones free for trader, the Apex bank should take the issue of withdrawing the bad notes as a social responsibility and change the notes for free for commercial banks.
The CBN should by all means get the bad notes out of circulation and help halt the continuous national embarrassment the mutilated notes are.