The Central Bank of Nigeria has issued a fresh warning to Deposit Money Banks and the general public against the rejection of standard ₦100 banknotes, whether old, dirty, or overcirculated, describing such actions as a violation of law that attracts strict sanctions.
The directive comes amid rising reports of banks and traders refusing to accept worn naira notes, a trend the apex bank says threatens public confidence in the currency and increases operational costs.
Sanctions For Banks That Reject Naira Notes
In a circular dated June 28, 2024, with reference number COD/DIR/INT/CIR/001/018, the CBN reminded Deposit Money Banks that penalties for rejecting naira banknotes remain enforceable. The circular was signed by Solaja Mohammed J. Olayemi, Acting Director of the Currency Operations Department.
“Deposit Money Banks are reminded that the CBN circular prescribing penalties for the rejection of Naira banknotes is still enforceable and binding on erring DMBs,” Olayemi stated.
The apex bank said it has received several reports of rejection of dirty and mutilated naira banknotes by some banks. It directed that all such notes must be accepted from customers and forwarded to the CBN for processing and replacement.
“Going forward, the Central Bank of Nigeria shall not hesitate to apply strict sanctions on DMBs reported to have rejected deposits of naira banknotes from the public, under any guise,” the circular warned.
The CBN also referenced an earlier circular from July 2, 2019, with reference number COD/DIR/GEN/CIR/01/006, which first outlined penalties for banks that reject naira notes.
All Denominations Remain Legal Tender
The CBN stressed that all naira banknotes issued by the bank, including old series and lower denominations like the ₦100 note, remain legal tender regardless of their condition.
This position aligns with Section 20(5) of the CBN Act, 2007, which mandates that no person should refuse to accept the naira as a means of payment.
In November 2023, the CBN had also clarified that both old and redesigned naira notes should be accepted, following reports of anxiety over the legality of old notes. “Every banknote issued by the Central Bank of Nigeria (CBN) remains legal tender and should not be rejected by anyone,” the bank said at the time.
The latest warning extends that assurance specifically to everyday transactions, where traders, transporters, and even some banks have been accused of turning away worn ₦100 and other lower denomination notes.
Currency Abuse Driving Up Costs
Beyond rejection, the CBN is also tackling broader abuse of the naira. At the flag-off of its nationwide sensitisation campaign tagged “Naira Our Pride: Handle with Care” in Abuja, the bank warned that poor handling practices are increasing the cost of printing and replacing banknotes.
Dr. Bala Bello, Deputy Governor, Operations Directorate, represented by Dr. Adedeji Adetona, Director of Currency Operations, said practices like folding, tearing, spraying at events, writing on notes, and outright mutilation “undermine the dignity of our national symbol and increase the costs of maintaining it”.“If we do not act today, poor handling of our notes will continue to raise the cost of printing and replacement, cause frustration in everyday transactions, and weaken confidence in our currency,” Bello added.
The campaign seeks to change public behavior and extend the lifespan of cash in circulation, especially ahead of periods of high cash demand like the festive season.
What Nigerians Should Do
The CBN has urged the public to accept all naira denominations in circulation and to report any bank that refuses deposits of dirty or mutilated notes. Customers are encouraged to channel complaints to the CBN’s Consumer Protection Department and through the bank’s official social media platforms.The apex bank also assured Nigerians of adequate cash supply nationwide to meet legitimate demand.
Stakeholders including commercial banks, microfinance institutions, transport unions, traders associations, schools, religious organisations, and the media have been called upon to support the sensitisation drive.“Banks must continue to educate customers and ensure fit notes are always in circulation. Markets and transport operators must help discourage the rejection or abuse of Naira notes,” the CBN stated.
Protecting The Naira’s Integrity
For the CBN, the issue goes beyond logistics. Officials say the naira represents national pride and sovereignty, and its treatment reflects public discipline.“The Naira is more than a means of payment. It represents our national pride, our sovereignty, and our shared destiny as a people,” Bello said.
With inflation and cash scarcity concerns still fresh in public memory, the CBN’s message is clear: rejecting a standard ₦100 note is not just inconvenient, it is illegal. Banks and businesses that flout the directive risk sanctions, while Nigerians are urged to treat the currency with care and confidence.
