Bank Customers’ Deposits Rise Ahead Release Of Redesigned Naira Notes

Bank Deposit of Old Naira Note Rise Ahead Release Of Redesigned Notes

Naira deposits in the commercial banks have increased since the Central Bank of Nigeria (CBN) announced that the country’s currency will be redesigned.

Prime Business Africa had reported that the N200, N500, and N1,000 notes will be redesigned and released on December 15, 2022. The move is to mop up the naira in circulation and also curb hoarding of the legal tender.

During the disclosure by the CBN to release the redesigned naira notes, the central bank said N600 billion is in the vault of commercial banks, out of the N3.3 trillion currency in circulation. N2.7 trillion is outside the financial system of Nigeria. 

As a result of the announcement, there has been an increase in deposits, according to CBN Director of Corporate Communications, Ostia Nwanisobi. 

“The CBN is pleased to note the positive response of the banking public to the policy through increased currency deposits across banks and other financial institutions. 

“CBN remains committed to the seamless implementation of the initiative to ensure the achievement of its objectives to preserve the integrity of the local legal tender by reducing the significant amount of cash outside the banking system and its use in criminal activities, curtail counterfeiting, and promote financial inclusion, amongst others,” Nwanisobi said. 

Meanwhile, the decision by the central bank had been criticised by the Finance Minister, Zainab Ahmed, who said redesigning the naira will lead to rise in dollar rate, as the local currency will drop in value. 

Ahmed told Senators that her ministry wasn’t “consulted at the Ministry of Finance by CBN on the planned Naira redesigning and cannot comment on it as regards its merits or otherwise.

“However as a Nigerian privileged to be at the top of Nigeria’s fiscal management, the policy as rolled out at this time portends serious consequences on the value of the Naira to other foreign currencies. 

“I will however appeal to this committee to invite the CBN governor for required explanations on the merits of the planned policy and rightness or otherwise of its implementation now.” 

The governor of the central bank, Godwin Emefiele, however, said the CBN received approval from President Muhammadu Buhari, and the presidency confirmed that it backed the apex bank’s decision.