In a move to meet the January 31 deadline for the old N1,000, N500 and N200 notes to cease being legal tender, the Central Bank of Nigeria will on Monday meet with mobile money/Point of Sales agents to plan for the newly launched cash swap programme targeted at fast-tracking the withdrawal of the old notes from circulation.
The apex bank had on Friday announced the cash swap programme in partnership with super agents and deposit money banks.
It made the announcement in a circular jointly signed by the Director of the Banking Supervision Department, Haruna Mustafa, and Director, Payments System Department, Musa Jimoh.
The circular was addressed to all the DMBs, mobile money operators, super agents and agents.
Super agents are companies licensed by the CBN to recruit agents for the purpose of agency banking.
The CBN said the cash swap programme would be effective from Monday, January 23, 2022.
It said the initiative was aimed at enabling citizens in rural areas or those with limited access to formal financial services to exchange old naira notes for the redesigned notes.
The old notes are expected to be out of circulation by January 31.
The circular stated, “The old N1000, N500 and N200 notes can be exchanged for the newly redesigned notes and/or the existing lower denominations (N100, N50 and N20, etc), which remain legal tender.
“The agent shall exchange a maximum of N10,000 per person. Amounts above N10,000 may be treated as cash-in deposit into wallets or bank accounts in line with the cashless policy. BVN, NIN, or voter card details of the customers should be captured as much as possible.”
To promote financial inclusion, the CBN said the service was also available to anybody without a bank account.
It said agents might, on request, instantly open a wallet or account, leveraging the CBN tiered know your customer framework.
This, according to the bank, will ensure that this category of the populace (unbanked citizens) is able to exchange or deposit their cash seamlessly without taking unnecessary risk or incurring undue costs.
The CBN also directed agents to sensitise customers to opening wallets/bank accounts and the various channels for conducting electronic transactions.
The circular added, “Designated agents are eligible to collect the redesigned notes from the DMBs in line with the revised cash withdrawal limit policy.
“Agents are also permitted to charge cash-out fees for the cash swap transactions, but prohibited from charging any further commissions to customers for this service.
“Agents shall render weekly returns to their designated banks regarding the cash swap transactions. The DMBs shall in turn render same to the CBN on a weekly basis.
“Principals (super agents, MMOs, DMBs) shall be held accountable for their agents’ adherence to the above guidelines.”
The apex bank said cash swap agents would be readily identifiable in all local governments, particularly those in the rural areas.
The National President, Association of Mobile Money and Bank Agents in Nigeria, Mr Victor Olojo, who spoke with Sunday PUNCH, said mobile money and bank agents would meet with the CBN on Monday to discuss the modalities for the cash swap programme.
He explained that there was a huge amount of cash in circulation and the timeframe provided for the old notes to cease being legal tender was too short.
“The liquidity outside is quite enormous. So, it will take a whole lot of concerted effort. We will be having another meeting with them (CBN officials) on Monday. We can do a lot, but that timeframe is a difficult one. But we will put in our best,” Olojo stated.
The AMMBAN president also said the normal withdrawal fee might apply to the cash swap programme, which is about two per cent of the cash withdrawn.
He, however, noted that the charges would likely be addressed during the meeting with the CBN.
1.5 million agents
Checks show that there are 1.41 million agents in the country with 1.04 million active PoS terminals as of September 2022.
However, the AMMBAN president told Sunday PUNCH that the figure was currently over 1.5 million.
He also noted that the cash swap programme could not involve all PoS operators as not all of them were in the rural areas.
A CBN document notes that nearly one in two adults do not use any formal (regulated) financial services.
The document also noted that only 47.6 million Nigerians were banked, adding that about 38.1 million were financially excluded.
Olojo also told Sunday PUNCH that the issue of insecurity would likely affect the operations of some PoS agents, noting that some measures were also in place to safeguard the agents and the cash.
“Agents, by virtue of what we do, are not allowed to handle unlimited cash. There is a limit to how much should be with an agent. A standard agent also has basic insurance cover,” he stated.
He added that a verified agent was not supposed to handle more than N1m in a day.
The National Public Relations Officer of AMMBAN, Mr Oluwasegun Elegbede, in a telephone conversation with our correspondent on Saturday, disclosed that the body met with officials of the CBN on January 16, 2023 to address the issue of poor circulation of the new notes.
He noted that the new circular was a result of the meeting with the CBN to ensure the speedy distribution of the new notes across the country.
“It is a response to our demand from the CBN. We met them on Monday (January 16), and part of our demand was that mobile money agencies should be brought in to ensure that the cash is circulated effectively and on time,” Elegbede said.
He also affirmed that the cash swap programme would be in line with the CBN’s withdrawal limit.
However, he noted that the programme would be targeted mainly at agents in rural areas.
“Strategic agents across the country, especially those in the rural areas, are meant to be a part of this. Once they collect the old notes, they have a particular threshold of new notes taken back to their agent locations to dispense to the general public,” Elegbede added.
On the possible cash-out fees, he noted that the circular had just been released and the stakeholders had yet to decide on any figure.
“As it concerns agents, of course, we have our standard rate that we charge. I think that will still apply across the board,” he stated.
Old notes rejection
Meanwhile, a number of businesses, including supermarkets and eateries, have informed their customers of plans to reject the old naira notes ahead of the deadline.
A popular clothier, Ruff ‘n’ Tumble, informed its customers via text messages that it would stop accepting the old naira notes two days before the deadline.
The text message read, “In accordance with the CBN directives, we will no longer accept old naira notes in our stores from the 29th of January, 2023. Thank you for your understanding.”
Spar Market, an Indian-owned supermarket chain in the country, said that from Wednesday, January 25, 2023, it would no longer receive old naira notes from customers.
A notice pasted at the entrance of the supermarket at its Opebi outlet stated that customers who wished to pay using the old naira notes had until January 25 to do so, or they would have to use their debit cards or pay via QR codes.
Also, Shoprite issued notices to its customers that it would adhere strictly with the CBN deadline of January 31, 2023.
A popular eatery, Chicken Republic, pasted on its notice boards that it would stop accepting the old naira notes five days before the deadline across all its outlets in the country.
However, this may be in violation of the CBN Act of 2007, which makes it a crime for anyone to reject valid naira notes.
Section 20(5) of the Act states, “A person who refuses to accept the naira as a means of payment is guilty of an offence and liable on conviction to a fine of N50,000 or six months’ imprisonment.”
CBN lists benefits
Meanwhile, the CBN has taken the ongoing sensitisation on the new naira notes to the Shasha Market in the Akure North Local Government Area of Ondo State and advised the traders to take their money to commercial banks.
The apex bank reiterated that there was no limit to how much of the old notes a customer could deposit till January 31, 2023, saying bank charges had been suspended on such deposits.
The Director, Branch Operations Department, CBN, Mrs Elizabeth Fasoranti, explained that the benefits of the currency redesign to the economy were enormous.
She noted that currency management was a key function of the bank as enshrined in Section 2 (b) of the CBN Act, 2007.
She said, “The benefits of the currency redesign to the Nigerian economy are enormous. This policy will help to control inflation as the exercise will bring the hoarded currency into the banking system, thereby making monetary policy more effective. It will also help with better design and implementation of monetary policy as we will have much more accurate data on money supply and monetary aggregates.
“We believe that this exercise will help in increasing financial inclusion, moving towards a more cashless economy, and ensuring greater formalisation of the Nigerian economy.
“The currency redesign will assist in the fight against corruption as the exercise will rein in the higher denominations used for corruption and the movement of such funds from the banking system can be tracked easily.”
In his remarks, the Seriki Hausa of the Shasha Market, Alhaji Ibrahim Dangari, appreciated the CBN team for deeming it fit to come and sensitise the traders urged them to take their old notes to banks as soon as possible and not to wait till they would expire.
The Iyaloja of the market, Mrs Bosede Abidakun, noted that the sensitisation was timely, adding that it would enlighten the traders more on the new naira notes.
She encouraged the trades not to reject the new notes and take the old ones to the bank before the deadline.
Similarly, the Branch Controller, Uyo, CBN, Mrs Itohan Ogbomon-Paul, appealed to the traditional rulers to help in enlightening their subjects on the new notes and the cashless policy of the apex bank in their respective communities.
Ogbomon-Paul made the appeal on Friday when she led other CBN officials from Abuja and Uyo branch on advocacy visit to the OkuIbom Ibibio and President-General of the Akwa Ibom State Traditional Rulers Council, Edidem Solomon Etuk, in his palace.
The branch controller, who spoke after presenting samples of the new notes as well as flyers and pamphlets to the monarch, explained that the old N1,000, N500 and N200, which were still being used side by side the new notes, would be phased out completely on January 31, 2023.
She stated, “We are here for the Central Bank of Nigeria’s sensitisation on the redesigned notes. As we speak, some of our officials are already going round the local government areas.
“We actually started the sensitisation drive since Wednesday in Uyo, but as we are here today (Friday), we said we would first come to pay homage to you and then continue with the other local government areas that we have not been to.”
Responding, the monarch assured the CBN team that he would use town criers to pass the message on the new naira notes to his subjects and appealed for the extension of the January 31 deadline in the interest of the under-banked.
The monarch stressed that there was also the need for the apex bank to do more sensitisation in rural communities on the cashless policy for the benefit of the underprivileged.
Etuk stated, “I am appealing on behalf of my people of Akwa Ibom State that the CBN should extend the deadline. The time given is too short. Whatever policy we introduce in the system, we must ensure that the underprivileged do not suffer.
“With the level of poverty in our midst, whatever policy we want to introduce must take a gradual process. As traditional rulers, that is our concern. You should extend the deadline and keep on sensitising the people to this cashless policy.
“I will send town criers immediately across the communities to disseminate the message on the deadline to the people. And on the day that we will be having a traditional council’s meeting in Uyo, I will invite you to come and sensitise them on the cashless policy.”