Some banks in Nigeria have began to issue the old Naira notes after the country’s supreme court ruled that the country’s old banknotes will remain as legal tender alongside the new Naira currency, at least until December 2023.
As per a report by Bloomberg, major financial institutions in the country such as Guaranty Trust Holding Co. Plc and Sterling Bank Plc had already started distributing the old 1,000, 500 and 100-naira banknotes by March 2023.
“The central bank is abiding by the supreme court’s ruling, as are the banks. I don’t think we need a directive to obey the court,” said Abubakar Suleiman, Chief Executive Officer for Sterling Bank, responding to a question whether the central bank has asked lenders to heed the court judgment.
In the ruling delivered on March 3, 2023, the Nigerian Supreme Court criticized the central bank’s abrupt demonetization process. The court also accused the outgoing president, Muhammadu Buhari, of undermining the democratic standing of the country when his administration did not comply with a temporary order that prevented it from moving forward with the demonetization process.
The court also said Buhari was at fault by wielding unconstitutional powers which caused unprecedented economic hardship on the citizens by denying them ownership and access to their monies. This was also said to be a breach of the rights of Nigerians.
The Central Bank of Nigeria had asked banks to swap the old notes for the new notes but many people received nothing in exchange for their old Naira notes when they brought them to commercial banks, according to reports in Nigeria.
The ongoing CBN Cash Swap Exercise in Ekiti State – Part of the Naira Redesign Sensitization nationwide. pic.twitter.com/U3doUfc6Gt
— Central Bank of Nigeria (@cenbank) February 27, 2023
The Naira swap policy ended up being more like a confiscation since commercial banks did not have new notes to offer in exchange, and the deadline of February 10 2023 deadline for the use of old notes was approaching rapidly.
However, the Central Bank insists that the new notes are available in their vaults for Nigerian commercial banks to collect and was still asking banks to mop up the old notes on the weekend following the Supreme Court’s ruling.
It remains to be seen what the general citizen reaction will be following the bank’s decision to distribute the old notes, particularly since there are now reports that some traders and motorists are already rejecting them.
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