On the 26th of October, 2022, The Central Bank of Nigeria announced that it would redesign the ₦200,₦500 and ₦1,000 notes. The announcement was made by the Bank’s Governor, Godwin Emefiele. The new naira notes will begin circulating from the 15th of December 2022. They will be used together with the existing notes until the CBN’s deadline of 31st, January 2023.
In this article, we take a deep dive into this announcement, simplifying the news and answering all your questions about the naira redesign & what it means for your business.
Why is this redesign happening?
According to the CBN, there is a lot of hoarding of naira notes by members of the public. This means that people are holding on to money without spending it!
“As at the end of September 2022, available data at the CBN indicate that N2.73 trillion out of the N3.23 trillion currency in circulation, was outside the vaults of commercial banks across the country; and supposedly held by the public.”
-Central Bank of Nigeria
But there is more! the CBN has other concerns that have necessitated the redesign of these naira notes.
The Bank stated that there is a shortage of clean and fit naira notes in circulation. This shortage has also come with a security risk because it has led to a rise in counterfeiting especially the N500 and N1,000 notes.
Finally, the naira notes have not been redesigned for over 20 years. This goes against global best practices that require currency to be redesigned every 5 to 8 years.
When will the new naira notes be released?
The new naira notes of N200, N500 and N1000 will begin circulation on December 15, 2022.
Does it mean the old naira notes will be invalid from December 15, 2022?
No, they won’t. The new and existing naira notes will circulate together. They will both be legal tender meaning that they are acceptable as a means of exchange for the purchase of goods and services.
Can I return naira notes to banks immediately?
Yes. You can pay these notes into your bank account immediately. But you will only be able to withdraw the new naira notes when the Central Bank begins to issue them from the 15th of December.
Will cash deposits cost more because I am returning a lot of cash?
This is the best part. Because of this policy, bank charges for cash deposits have been suspended with immediate effect. This means you can deposit as much as you want without any bank charges.
When is the deadline to return naira notes?
You have till the 31st of January 2023 to return existing N200, N500 and N1,000 naira notes.
What does it mean for my business?
- Keep an eye out for fraudsters who may want to make bulk purchases using fake currency. Carefully inspect naira notes to ensure that they are genuine.
- If you run a business in a rural area that is a distance from a bank, it is wise to make your cash deposit early so you can avoid the stress and crowd that will accompany the deadline.
- Communicate this information to your customers so they are aware and take action.
- Prioritise using digital channels like USSD, mobile apps and internet banking for your payments instead of keeping a lot of cash in your possession.
- Get a POS to accept card payments for your business and enable faster customer service.
The present N200, N500 and N1000 naira notes remain legal tender. They cannot be rejected as a means of exchange for the purchase of goods and services until after the 31st of January, 2023.
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