Why Banks Hoard New Naira Notes

Despite the official unveiling of the redesigned naira notes in November last year, the new currency is short in circulation.

The redesigned denominations introduced by the Central Bank of Nigeria (CBN)  are N‎1000, N500 and N‎200 to replace the old ones with the deadline on January 31, 2023.

It is gathered that one of the purposes of the policy among other things, was to control votes buying by desperate politicians ahead of the 2023 elections.

Deposit Old Naira Notes In Banks, CBN Tells Bauchi Traders

Despite launching the notes and setting a deadline to turn in the old ones, commercial banks continued dispensing the old notes.

CBN had last week intensified the awareness of the policy, maintaining that the deadline remained sacrosanct, adding erring banks would be sanctioned.

However, Shehu Sani, the former Senator representing Kaduna Central, tweeted that banks intentionally hoard the new currency to give it out to the politicians for their election campaigns.

“Banks are hoarding the new currency from the public with the intent of making it available for politicians next month to be able to buy votes. The ultimate aim of redesigning the national currency is defeated,” the former Senator tweeted.

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The post had in less than five hours generated a lot of reactions from tweeps with over 2000 likes and about 1000 retweets.

Corroborating Sani’s claim, Baba Atsar Gundu said that CBN should know that some of the commercial banks are owned by Nigerian politicians.

“Therefore it is difficult to do the bidding of the apex bank without consulting the owners of the banks,” he said.

Kano Traders Reject CBN’s Withdrawal Limit Policy

In contrast, a Twitter user identified as Toye dismissed Sani’s position. He argued that the apex bank did not supply the new notes as needed.

“I disagree, Sir. The truth is that they are only deceiving us. The new notes are being released piecemeal by the CBN and are not enough for banks to dispense to the public. If otherwise, let CBN publish daily the amount of new notes supplied to banks A B C etc and sanctions defaulters,” tweeted Toye.

It’s believed that a larger amount of the naira notes in circulation are old notes as a majority of the holders do not have bank accounts.


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