In spite of the assurance given by the Central Bank of Nigeria (CBN) that the old naira notes remain a legal tender and are to be used alongside the redesigned banknotes, households and small businesses are currently facing hard times accessing cash across the country.....CONTINUE READING
The Nigerian Observer visited a number of commercial banks in Benin City only to find out that their Automated Teller Machines (ATMs) were not loaded with cash, while customers who entered the banking halls said there were restrictions on the amount every customer could withdraw due to cash scarcity.
This is as residents of Benin City, the Edo State capital, have expressed their displeasure on the scarcity of naira and the associated increase in POS charges. They lamented that the current situation would further aggravate and worsen the current economic hardship being experienced across the country.
It should be recalled that during the naira scarcity before the general elections, the Supreme Court of Nigeria had ruled earlier in the year that the old naira notes, including N200, N500 and N1,000, should circulate as legal tender up till December 2023.
As the deadline approaches, commercial banks in the countries have switched on a cautious mode by not loading their ATMs with old naira notes, while awaiting directives from the apex bank to guide them on their next line of actions.
But in a swift reaction, the Central Bank of Nigeria (CBN) issued a press release through its Director of Corporate Communications, Isa AbdulMumin, informing the public that both the old and the redesigned notes should circulate as legal tenders in the country ad infinitum.
“Without prejudice, the Central Bank of Nigeria wishes to inform the general public of its desire to extend the legal tender status deadline of the old design of N200, N500 and N1,000 denominations, ad infinitum,” CBN said.
“This is in line with international best practices and to forestall a repeat of earlier experiences. Thus, all banknotes issued by the Central Bank of Nigeria (CBN), in accordance with Section 20(5) of the CBN Act 2007, will continue to remain legal tender, ad infinitum, even beyond the initial December 31, 2023, deadline.
“The Central Bank of Nigeria is working with the relevant authorities to vacate the subsisting court ruling on the same subject. Accordingly, all CBN branches across the country will continue to issue and accept all denominations of Nigerian banknotes, old and redesigned, to and from deposit money banks (DMBs),” it said.
Meanwhile, some POS operators in Benin City have capitalized on this development by hiking their charges on withdrawals. They blamed the new rates on the scarcity of cash, adding that they now buy cash to dispense to their customers. They also accused commercial bank workers of hoarding cash and selling it to some of their cronies so as to make huge gains.
Theophilus Omorodion, a POS operator at Sapele Road in Benin City, blamed the hike in POS charges on the withdrawal limits imposed by banks, saying that POS operators now buy cash from market women, business people and others who generate cash daily.
Omorodion said, “Our charges used to be N100 to withdraw N5000, and N200 on N10,000. But we now charge N200 on N5000 and N400 to withdraw N10,000. This is because banks have reduced the amounts of cash customers can withdraw through ATMs and over the counter.
“I used to withdraw over N200,000 per day and N100,000 through an ATM. But now, I can only get N50,000 via over the counter and N20,000 daily limit from ATMs. So, the only way I get additional money is to buy cash from market women and business owners that generate cash on a daily basis.”
Another POS operator who spoke on condition of anonymity blamed the scarcity of cash on some commercial bank workers who deliberately hoarded it in a bid to sell it to POS operators at a premium.
“Many bank workers have family and friends that are POS operators so they hoard cash to give it to either the people that are close to them or sell the cash to POS operators thereby getting profit in return,” the POS operator said.
Precious Onwubushi, a customer of one of the commercial banks in Benin City, frowned at banks’ inability to load their ATMs with cash and the associated increase in POS charges, noting that it was disappointing to go through this experience again after what Nigerians experienced during the cash crunch at the beginning of this year.
“I have been to so many ATMs but couldn’t get cash because none of the machines was dispensing cash. I then approached a POS operator to make a withdrawal of thirty thousand naira only to be told that I have to pay charges of N1,000. This was so disappointing to me because the last time I experienced something like this was during the cash crunch that greeted the CBN naira redesign policy before the 2023 general election,” Onwubushi said.
Kelvin Okorie, a Benin City resident, told The Nigerian Observer that he went to one of the commercial banks in the city centre to withdraw some money. After he filled out a withdrawal slip to withdraw a certain amount, he was asked to refill it for a lesser amount because of cash scarcity.
“I entered Ecobank to withdraw the sum of N100,000 and after filling the withdrawal slip, I then stood in the queue to collect the money. When it got to my turn, to my greatest surprise, I was asked to refill the slip for the sum of ten thousand naira only,” Okorie said.