The House of Representatives yesterday asked the Central Bank of Nigeria, CBN, to extend the deadline for use of the old naira notes by at least six months, since the new notes were not readily available.
It also insisted that chief executive officers of banks in the country must appear before the ad hoc committee set up by the House to investigate reasons for the scarcity of the new notes.
According to the lower legislative chamber, both the old and new notes can be in use till June, in line with the CBN Act.
Speaker of the House of Representatives, Femi Gbajabiamila, who made the call after a briefing by the ad hoc committee, led by the House leader, Ado Doguwa, to resolve issues around the new naira notes, said the extension had become necessary, in view of the scarcity of the new notes in commercial banks.
He said: “The House of Representatives recognizes the Central Bank of Nigeria’s, CBN, authority to determine the country’s legal tender and to recall currency with reasonable notice, subject to the approval of the President.
‘’The House is also aware that Section 20 (3) of the Central Bank of Nigeria (CBN) Act mandates the CBN to redeem the face value of the recalled currency upon demand, even after the expiration of the notice of recall.
“Notwithstanding the deadline imposed by the Central Bank of Nigeria, CBN, this House will see to it that this provision of the law is honoured in full.
“Let me explain that again. The Central Bank Act under section 20 allows the Central Bank to change the legal tender. But it also says that after the expiration date, such naira note changed will no longer be legal tender.
‘’But it says that 2, 3 to 5 months after, even in June, any old notes presented to the banks shall be redeemed by the banks. That point needs to be made to the Central Bank and to the public. It has not been made. It’s a provision of law.”
CBN under Soludo listened to public outcry
Gbajabiamila recalled that in 2019, the then-governor of the CBN, Professor Charles Soludo, gave an extension in phasing out old naira notes when the polymer notes were introduced.
“Gentlemen, if you recollect, in 2009 and 2010, the then governor of Central Bank, Professor Charles Soludo, introduced polymer notes and wanted to phase out N5, N10, N20, and N50 notes.
‘’There was public outcry because of the timing. At the end of the day, it was halted and what did he do? He did what all known Central Banks do all over the world. He allowed for those N50 notes to continue in existence, whilst he introduced his new naira notes until everything was mopped up by the banks.
‘’So, they were operating side by side for the good of the people. This is exactly what happened. And that is all this House is asking, either an extension or part-parse.
“Section 20 (3) of the CBN Act is perhaps what is most important right now. After the deadline, whilst the old notes are no longer legal tender, I cannot go to a supermarket, buy goods in the supermarket and bring out my old notes, It’s no longer a legal tender.
‘’Now, if the superman attendant decides to take it, all well and good. If he decides to take that money (old notes) to the bank a month later, the bank is under statutory obligation to accept it and redeem it at face value and that is the provision of the law as passed by the National Assembly.”
Gbajabiamila told his colleagues he was in possession of a letter from the CBN that the CBN governor, Godwin Emefiele, was on a trip with President Muhammadu Buhari to Dakar, Republic of Senegal and would not be available for the meeting.
The speaker read the letter to his colleagues: “We refer to your letter referenced 25 January 2023, inviting the governor of the Central Bank of Nigeria, CBN, Mr Godwin Emefiele to appear before the House of Representatives on Thursday, which is today (yesterday), January 26, 2023.
“The governor is part of President Muhammadu Buhari’s delegation to Dakar, Republic of Senegal for the Feed Africa Summit from 25th to 27th January 2023.
“Accordingly, he has requested that we respectfully acknowledge his inability to honour the invitation on the scheduled date.
“The governor regrets this and requests that the chairman and the members of the committee be informed accordingly.
“Please, accept once again the governor’s highest consideration and warm regards. That was signed by the deputy governor, corporate services.”
The speaker insisted that the chief executive officers of banks in the country must appear before the ad hoc committee to explain why they were not disbursing the new notes to customers.
His insistence came against the backdrop of reports by the committee chairman and leader of the House, Ado Doguwa, that the bank chiefs had failed to appear before the committee.
He threatened to issue a warrant of arrest against them should they fail to appear before the ad hoc committee next Tuesday.
We ‘re bound by CBN’s guidelines – Banks
But defending their banks yesterday, representatives of banks told the House that they were bound by the guidelines of the Central Bank of Nigeria, CBN, as their regulator in the implementation of the cashless policy.
The banks said they dispensed to customers through the Automated Teller Machines, ATMs, and the new naira notes they received from the CBN.
They said that due to the cashless policy, they were not expected to collect as much money as deposited with the CBN, stressing that the public should first understand the import of the policy.
We are getting an allocation of new notes from CBN
They also revealed that the new naira notes could only be accessed through the ATM and not the counters.
”We collect the new notes and load them at the ATM as quickly as we get them. Unfortunately, we are not getting them quickly. We have got about 10 per cent of the total money. That is a challenge that we have. We are doing the best we can,” said a representative of one of the new generation banks.
Representative of another new generation bank, Mohammed Abdul, said: ” On the issue, we have been receiving the new notes and returning the old notes. However, in the last few weeks, it’s been very insufficient what we are receiving. We received an average of N40 million weekly for our bank in Abuja”.
Another bank’s representative, Orlando Umoren, said: “Looking at the issue on the ground, CBN presents allocations to banks, whether or not this allocation is sufficient is a different ballgame.
”As I speak with you, all our ATMs are dispensing. Allocations are shared. What we received fluctuates. We received a minimum of N150 million to be shared. In Kaduna, N150 million, in Kano, we received N100 million to be shared among the branches in the metropolis.
”They are being fed in the ATM only and not to be given to the customers across the counter. In Abuja here, what we are given is about 80 per cent. In Kano, it is less than 10. What we get in return is nothing comparable…
”The reason the new naira note is not coming is in furtherance of the cashless policy. The banks are still under pressure to ensure that they meet the deadline.”
Similarly, another bank staff, said: “We collect old notes and distribute new notes. We have been doing that. In terms of numbers, I can’t give you one. We collected more than 60 per cent of what we sent.
”Across the country, we collected about 60 per cent about two days ago of what we sent. We won’t collect as much as we deposited because of the cashless policy. We have collected more than 60 per cent of the new notes but it varies from town to town.”
The response of the bank’s representative obviously did not meet the expectations of the lawmakers who expressed disappointment that there were no straight figures of the new naira notes to quote, an observation the chairman, Doguwa, said was very discouraging.
Lawmakers defer adjournment
Consequently, Gbajabiamila announced that the House would no longer adjourn yesterday as planned, to enable the bank chiefs to appear.
He said the House would now hold a session next Tuesday to ensure that the issue was finally resolved.
Appealing to members of the House to bear with the leadership of the lower chamber, the speaker said: “Gentlemen, please, it is a sacrifice, the Senate has gone on break, we are supposed to close the House so that everybody can go an prepare for an election in four weeks but we may need to make a day or couple of days sacrifice.
“Instead of adjourning this House till February 28 today, just to make sure we resolve this issue, we might need to come back next Tuesday morning.’’
