The Central Bank of Nigeria (CBN) has announced plans to penalise Deposit Money Banks (DMBs) over the inclusion of mutilated notes in their deposits with the apex bank.
The CBN made this known at the weekend in a circular signed by Ahmed Umar, director of the currency operations department at the bank.
Mr Umar said the new directive took effect from April 1.
The bank expressed worry over the increase in the number of composed banknotes in circulation.
Composed banknotes are mutilated currency notes that consist of several parts of different banknotes of the same denomination. The parts of such currency notes are usually put together to receive value.
Mr Umar said the existence of such mutilated banknotes falsified the true value of the currency in circulation, adding that it could as well encourage fraud.
With effect from April 1, composed banknotes discovered in the deposit of DMBs shall attract a penalty of 400 per cent of the value, the CBN official said.
“The management of the CBN observed with concern the increasing number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public,” CBN said.
“Consequently, any composed banknote discovered in the deposit of DMBs shall attract a penalty of 400 per cent of the value.”
By implication, the CBN will begin to place a fine of N4000 on every mutilated N1000 note discovered in banks’ deposits with the apex bank.
In recent years, the CBN has been at the vanguard of ridding the economy of bad, mutilated notes.
In February 2020, the bank said that about 100 tonnes of bad naira notes were generated as waste and destroyed weekly through open-air burning at its 12 disposal centres across the country.
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