House asks Central Bank of Nigeria to halt surcharge on mutilated banknotes


By James Emejo | This Day, Nigeria October 6, 2017

The House of Representatives thursday passed a motion urging the Central Bank of Nigeria (CBN) to stop the imposition of surcharge on commercial banks which return dirty, worn-out and mutilated currency notes for destruction and re-issuance.

It further mandated its Committee on Banking and Currency to liaise with the apex bank to harness modalities for handling, returning and destroying damaged and mutilated notes and report back within eight weeks for further legislative action.

The resolution was based on a motion sponsored by Hon. Sergious Ose Ogun (PDP, Edo) on the removal of surcharge by the CBN on mutilated notes.

He noted widespread circulation of dirty, mutilated and worn out notes contrary to the requirement that they be replaced by commercial banks when they are worn out or defaced as long as the central bank’s and Treasury’s serial number can still be seen on the notes.

He expressed concern that though in the past, such notes were replaced by commercial banks, banks now routinely reject torn, defaced and mutilated notes which customers bring for deposits.

He said despite the regulatory position of the CBN, it is apparently encouraging the outrageous and appalling practice of the commercial banks in rejecting the notes.

He argued that the continued circulation of defective notes called for concern and also raises the need for close investigation and constant monitoring of the process of destruction of the notes, as continued printing of new currency notes without destroying mutilated notes contributes to the inflationary trend in the economy.

Ogun said the practice of rejecting mutilated notes by banks is as a result of the refusal of the CBN to recycle the old and defaced notes, and even imposes ludicrous charges on commercial banks, which serve as central collection points for CBN to effectively carry out its functions under Section 18 (d) of the CBN Act.

The motion was unanimously passed.

Related stories


AsokoNews Brief

Sign up for our weekly Africa Business Digest, highlighting the Top 5 stories per sector