CBN To Fine Banks For Paying Counterfeit Banknotes

The Central Bank of Nigeria has imposed a penal fee of N1m on each branch of Deposit Money Banks for non-compliance with its ‘Banknote fitness guidelines and clean note policy documents for the industry.’

The
regulator 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.”

The apex bank 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.

According to the CBN, 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.

Over the years, it observed that the growth
in economic activities and the upsurge in population had necessitated
the rise in the volume of banknotes in circulation.

In view of
technological advances, the CBN, like other central banks, had
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 regulator 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.

A large proportion of the notes in circulation,
according to the CBN, are dirty and mutilated and not fit for ATMs and
over the counter payment.

Source:- Punchng