Each branch of Deposit Money Banks (DMBs) in the country that pays out counterfeit or mutilated banknotes will be fined N1 million, the Central Bank of Nigeria (CBN) has said.
According to the CBN, such goes contrary to its ‘Banknote fitness guidelines and clean note policy documents for the industry.’
The apex bank disclosed this in a circular to all DMBs on ‘Penalty for payment of counterfeit monies from ATMs, Teller Points’ on Wednesday.
It said: “The management of the CBN has observed with concern the incidences of counterfeits paid through some DMBs’ ATMs/Teller points. This situation has continued unabated despite moral suasion to the affected DMBs.
“To address this, among others, the CBN in collaboration with key currency management stakeholders developed ‘Banknote fitness guidelines and clean note policy documents for the industry.”
“In order to sustain public confidence in the national currency and ensure compliance with the provisions of the policy documents, the CBN said it approved the, “Spot checks on DMBs’ ATMs and Teller points to ensure compliance; and imposition of penal fee of N1m per branch of DMBs for non-compliance.”
Read also: CBN raises alarm over Nigeria’s rising debt
The CBN also said that the enforcement of the sanction would take effect after the launch of the two policy documents at a date which would be communicated to all stakeholders.
The apex bank, which claimed that it has the statutory obligation to provide adequate supply of clean banknotes to facilitate seamless payment and settlement of transactions by the public, government and banks, said it observed that the growth in economic activities and the upsurge in population had necessitated the rise in the volume of banknotes in circulation.
It also noted that in view of technological advances, the CBN, like other central banks, introduced various forms of electronic payment systems for an effective and efficient settlement of transactions and to reduce the volume of cash usage with its attendant cost implications.
The CBN however noted that demand for cash continued to grow despite technological advances.
“The volume of currency in circulation as at the end of 2012 rose significantly by 10.34 per cent to N7.91tn pieces, as at half year of 2018,” it stated.