Naira redesign: More bank customers embracing cashless banking

• Published date: 02 February 2023
• Publication title: Nigeria - The Nation

Many activities have continued to define the Central Bank of Nigeria (CBN)-led naira redesign policy, which saw the emergence of new N200, N500 and N1,000 bank notes and an increase in the number of customers adopting the cashless banking initiative. It has also presented opportunities for bank customers to deposit old naira notes at their banks for exchange on or before the February 10, 2023 deadline.The N2.7 trillion cash mop up targeted in the exercise is expected to enhance CBN's cash management systems and boost monetary policy decisions, writes Assistant Business Editor COLLINS NWEZE.

Issues around cashless banking and cash management are topical these days. Not so before now.

That explains the interest the Central Bank of Nigeria (CBN)-led naira redesign policy has generated across the society in recent months.

From people at the grassroots to high networth individuals and companies, the ongoing naira redesign policy and move by the CBN to phase out N200, N500 and N1,000 old bank notes and ensure adequate circulation of the newly redesigned notes has attracted diverse reactions.

CBN Governor, Godwin Emefiele, gave an insight to the expected impact of the policy on the financial system and economy. He said N1.9 trillion has been mopped up from the economy with N900 billion more cash deposits expected to be in the banks by the end of the February 10, 2023 deadline set for people to return old notes to the banks.

He said the extension of previous deadline of January 31, was to give Nigerians that have naira legitimately earned and trapped, the opportunity to deposit their legitimately trapped money at the apex bank for exchange.

Also, those who still have the old notes after February 10 will enjoy a seven-day 'grace period' to deposit them directly with the CBN.

'There is also a seven-day grace period beginning on February 10 to February 17, 2023, in compliance with Sections 20(3) and 22 of the CBN Act allowing Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have lost its Legal Tender status,' Emefiele said. The CBN boss added that in 2015, currency-in-circulation was only N1.4 trillion. But as at last October, it had risen to N3.23 trillion; out of which only N500 billion was within the banking industry and N2.7 trillion held in people's homes.

'Ordinarily, when CBN releases currency into circulation, it is meant to be used and after effluxion of time, it returns to the CBN, thereby keeping the volume...