Naira Swap: Banks, courts, businesses, others reject old banknotes as consumers lament increasing hardship

*Despite the Supreme Court’s ex parte ruling on legality of the old Naira notes as a legal tender pending its decision Wednesday, February 15,  several commercial banks, courts of law, marketers, businesses and individuals have been rejecting old N200, N500 and N1000 notes for deposits or payments for transactions, deepening consumers’ pains in the economy

Isola Moses | ConsumerConnect

Sequel to the Supreme Court ex parte order on legitimacy of the old Naira notes as a legal tender pending its decision Wednesday, February 15, 2023, commercial banks, competent courts of law, marketers, businesses and Nigerians in general have continued to reject the old N200, N500 and N1000 notes.

The Supreme Court, in a ruling February 8, had suspended the CBN’s February 10 deadline to stop the use of old currency notes.

ConsumerConnect checks in markets, banks, and business places located in Lagos State, however, indicated that this negative development had continued to compound the citizens’ anxiety and attendant socio-economic hardship amid the current Naira cum fuel scarcity in the economy.

It was also gathered that besides the rife allegation of hording of the redesigned Naira notes, several banks are equally culpable in mismanaging distribution process of the new banknotes across Nigeria.

Speaking on realities of situation noticed in certain commercial banks in Lagos, Chief Adeolu Ogunbanjo, National President of the National Association of Telecommunications Subscribers (NATCOMS), in a telephone chat with ConsumerConnect late Monday, February 13, 2023, noted commercial banks, including Access Bank Plc, FCMB, Zenith Bank and Polaris Bank Limited, had been rejecting deposits with the old Naira notes.

Ogunbanjo said the banks that were rejecting deposits with old notes from customers “are the problem now.”

The consumer protection advocate also contended that the financial institutions had begun to refuse deposits in old notes as of Monday, saying the banks insisted they would only accept the old Naira notes after the Supreme Court’s expected pronouncement February 15.

Ogunbanjo, however, urged the authorities, including the Federal Government and Central Bank of Nigeria (CBN) to call such commercial banks to order.

“They are courting consumers’ trouble” as things currently stand in the Nigerian economy, he stated.

Are old banknotes losing legitimacy among Nigerians?

The old N200, N500 and N1000 have lost their legitimacy in the eyes of the public, such that even courts are rejecting them.

Specifically, lawyers and litigants Monday, were prevented from filing court processes at the Lagos High Courts, as officials insisted they would only accept new Naira notes, according to report.

It was also learnt that several lawyers and litigants were turned back by court officials at the registry.

According to them, the banks no longer accept the old N200, N500 and N1000 notes as a legal tender in the country’s financial ecosystem.

Powerful Nigerians behind  rejection of new banknotes: MPC member

Prof. Mike Obadan, a member of the Monetary Policy Committee (MPC) of the CBN, reportedly observed the currency rejections happened and the Naira redesign policy was becoming chaotic due to resistance from some powerful Nigerians opposing it for personal interests.

Obadan, a professor of Economics, who stated this while featuring on a Nigerian Television Authority (NTA), noted that CBN was prepared for the currency redesign exercise, but alleged that some “unscrupulous persons” were sabotaging the process in Nigeria.

For instance, at the Lagos High Court, some accounts officers at the registry, who spoke on condition of anonymity to ThisDay, said their attempts to deposit old notes they had earlier collected into the government account were rejected by Polaris Bank. He advised lawyers who did not have new Naira notes to take advantage of e-Filing, which he said could be done from the comfort of their chambers, homes or anywhere.

The officials further said the only currency acceptable for filing of court processes in the Lagos Judiciary Registry was the new Naira notes the CBN is releasing into circulation.

A lawyer at the Lagos High Court, who did not want his name mentioned, said he was at the court registry at Osborne Division, Ikoyi, to file processes, but was turned back because he had only old naira notes.

It is recalled the CBN had directed consumers to swap old N1, 000, N500, and N200 banknotes with a redesigned currency by the deadline.

However, the Supreme Court ruling in an ex parte application by three states – Zamfara, Kogi and Kaduna – stopped the CBN from banning the old notes pending the hearing and determination of the case.

It fixed February 15 for hearing, while the move to ban the old banknotes has continued to cause confusion among bank customers.

A seven-member panel of the court, led by John Okoro, gave the order of interim injunction.

CBN’s declaration on legality of old banknotes in circulation

Amid the confusing atmosphere in regard to the Naira scarcity legality or otherwise of the old notes as a legal tender, Haladu Idris Andaza, Branch Controller of CBN Branch, in Bauchi,  Bauchi State, Monday, February 13, 2023, affirmed to reporters at the CBN Branch, in Bauchi that “for the avoidance of doubt, we wish to state categorically, that CBN is ready and is opened to receive all of those old notes based on certain conditions and criteria.”

Andaza said: “Customers are free to come to the Bank and deposit which they cannot do at the commercial banks anymore because the currency has ceased to be a legal tender since the 10th of this month.

“Consequently, the management of the CBN decided that those customers will have a sigh of relief by coming to the offices of the CBN in all the 36 states in the Federation including FCT to deposit their money.”

The CBN Branch Controller declared: “The customer has to go to the CBN portal and fill a form in the portal, there will be a form there concerning this currency redesign and exchange.

“After filling the form, you generate a code, you either print it or come with it in your mobile phone, give us the code and the information contained therein.”

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