CBN Warns Banks Not to Reject Mutilated Naira Notes

Samuel Mobolaji

The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) regarding the rejection of dirty or mutilated Naira notes.

According to the bank, the directive comes in response to numerous reports received by the CBN about some banks refusing to accept dirty and damaged currency from the public.

In a circular dated 28 June 2024, signed by Solaja Olayemi, the acting director of the currency operations department, the CBN reiterated that the guidelines outlined in its previous circular from 2 July 2019, remain in full effect.

The 2019 directive specified penalties for banks that reject Naira banknotes.

“The Central Bank of Nigeria shall not hesitate to apply strict sanctions on DMBs who are reported to have rejected deposits of Naira banknotes from the public, under any guise,” the circular stated.

The issue of mutilated banknotes has long been a concern in Nigeria, amid efforts to ensure that notes are better handled by the public.

Section 21 of the CBN Act specifically prohibits the abuse of Naira notes, prescribing penalties for offenders that include fines and imprisonment. According to Section 21 (1) – (3) of the CBN Act, a person who tampers with a coin or note issued by the Bank is guilty of an offence and shall on conviction be liable to imprisonment for a term not less than six months or to a fine not less than N50,000 or to both such fine and imprisonment.

“A coin or note shall be deemed to have been tampered with if the coin or note has been impaired, diminished or lightened otherwise than by fair wear and tear or has been defaced by stamping, engraving, mutilating, piercing, stapling, writing, tearing, soiling, squeezing or any other form of deliberate and willful abuse whether the coin or note has or has not been thereby diminished or lightened.

“For the avoidance of doubt, spraying of, dancing or matching on the Naira or any note issued by the Bank during social occasions or otherwise howsoever shall constitute an abuse and defacing of the Naira or such note and shall be punishable under Sub-section (1) of this section.”