Nigerian Banks Face Sanctions for Rejecting Small and Old US Dollar Notes

The Central Bank of Nigeria (CBN) has issued a stern warning to banks and other authorized foreign exchange dealers against the continued rejection of old series and lower denominations of the United States dollar.

The apex bank has threatened to impose sanctions on any financial institutions that fail to comply with this directive.

This directive was outlined in a circular dated June 27, signed by Solaja Olayemi, the acting director of the currency operations department.

The circular was recently released on the CBN’s official website and is aimed at Deposit Money Banks (DMBs), Bureau De Change (BDC) operators, and the general public.

The CBN’s warning follows the outcome of its consumer market intelligence, which revealed that banks and other authorized forex dealers have been persistently rejecting old and lower denomination dollar bills.

This practice, according to the CBN, is against the bank’s policy and must cease immediately.

“Kindly be reminded that the Central Bank of Nigeria circular referenced COD/DIR/INT/CIR/001/002 and dated 9th April 2021, which explicitly frowned at this selective acceptance of deposit, is still in force and must be adhered to and complied with by all relevant parties,” the circular stated.

“For the avoidance of doubt and further guidance on the circular, the content is hereby reissued as follows for strict compliance: All DMBs and authorized forex dealers should henceforth accept both old series and lower denominations of United States Dollars that are legal tender for deposit from their customers. The CBN will not hesitate to sanction any DMB or authorized forex dealers who refuse to accept old series/lower denominations of US Dollar bills from their customers.”

The CBN also addressed the issue of defacing or stamping US Dollar banknotes, cautioning that such actions result in the notes failing authentication tests during processing and sorting.

This practice has been noted as another area where banks and forex dealers must exercise compliance to avoid penalties.