Naira crisis: Banks ration old currency, and the NLC issues a seven-day ultimatum

Due to uncertainty regarding whether the Central Bank of Nigeria will release the old notes in its custody, Deposit Money Banks have begun rationing the distribution of old N1,000 and N500 notes to their clients.

 

This occurred approximately 24 hours after CBN Governor Godwin Emefiele declared that old N1,000, N500, and N200 notes were still legal tender.

 

Nevertheless, despite the CBN’s statement on Monday night, the Nigeria Labour Congress reaffirmed its seven-day ultimatum to the Federal Government to end the cash shortage on Tuesday.

 

The position of the central bank followed several weeks of uncertainty regarding the legal status of the old currencies as a result of a series of Supreme Court rulings in a lawsuit between some state governments and the Federal Government.

 

The CBN’s announcement was expected to end the shortage of old and new naira notes that had caused Nigerians pain, it was revealed on Tuesday that the naira crisis may not be over anytime soon.

 

Our correspondents’ investigations revealed that banks were rationing old currency to their customers via over-the-counter payments, with a few lenders loading their ATMs.

 

The majority of lenders in Lagos, Abuja, Ogun, Kwara, and other states paid only N5,000 to each customer over the counter, while only a few banks paid N10,000.

 

Further investigation revealed that only a few banks loaded their ATMs, with the majority dispensing only N5,000.

 

Top bank executives disclosed that the majority of banks were paying out what was left in their vaults after sending a significant portion of their old naira deposits to the CBN several weeks prior.

 

According to other officials, lenders were also paying customers with small deposits made by customers.

 

Lagos banks

 

Due to the naira shortage, Wema Bank in Ilupeju, Lagos, restricted ATM withdrawals from cards issued by other banks and dispensed only old naira notes.

 

When we visited the branch, Wema Bank customers could only withdraw N10,000 with their cards, while customers of other banks could only withdraw N4,000.

 

Prior to being permitted to make deposits at the Access Bank branch on CMD Ikosi Road in Lagos, customers were required to generate a code from the CBN portal.

 

Despite the fact that the CBN had declared old notes legal tender, this was deemed mandatory.

 

One of the bank representatives who assisted our correspondent stated, “We are paying the old notes, but if you wish to deposit them, you must generate the PIN from the CBN website.”

 

A visit to the First Bank branch in Mazamaza, along the Lagos-Badagry Expressway, revealed that the bank had begun issuing the old notes through over-the-counter withdrawals.

 

At the Union Bank branch in Mazamaza, circumstances were identical.

 

In Oshodi, Lagos, the branches of United Bank for Africa, Access Bank, and Fidelity Bank distributed old currency to their customers, despite lengthy lines.

 

One of the three Automated Teller Machines at the Fidelity Bank branch was dispensing obsolete N1,000 notes.

 

Helen Orji, the customer who collected the old notes from the ATM, expressed relief.

 

She stated that this was her first time withdrawing cash from an ATM.

 

“It’s a tremendous relief. PoS charges are lethal. I wanted to purchase baby formula on Monday, so I went to collect N5,000 but received N4,000 instead. It was insufficient to purchase what I wanted. Normalcy has been restored, which is a relief.”

 

Moreover, when a bus driver on the Mile 2-Oshodi route attempted to refuse the old notes on Tuesday, his passengers revolted and began handing him old N500 and N1,000 bills. He conceded and accepted the old currency.

Old records

 

Omolayo Shittu, a businesswoman who went to Oshodi on Tuesday to purchase fabric, told our correspondent that merchants had begun accepting the old currency.

She stated, “They are collecting and distributing old currency. A point-of-sale employee who claimed to have only old currency was nearly slapped by traders who insisted there was no such thing as old or new currency.

 

“I have instructed my store to begin collecting old currency,”

 

Our correspondent visited three banks on Tuesday: First, Bank First City Monument Bank, and UBA. On Tuesday, banks along the Alagbole-Akute axis dispersed old currency. While all three banks were distributing the old naira notes to customers over the counter, only FCMB had loaded their ATMs with cash.

 

In the meantime, merchants and supermarkets around the axis had begun to accept the old notes from customers, although some of them were still exercising caution by insisting they would not accept any old notes until the uncertainty surrounding it dissipated in the coming days.

 

On the other hand, transport operators in the region remained steadfast in their rejection of the old notes.

 

Damilare, a tricycle operator, told our correspondent that many transport operators were still hesitant to accept the old notes because they had not yet regained widespread acceptance among the general public.

 

Damilare said, “It’s risky. Some individuals are collecting, while others are not yet collecting. Because I may not be able to spend it, I do not wish to collect it.

 

The proprietor of a supermarket, Bukola Vivian, stated, “I’m accepting the old bills. I anticipate that the confusion will be resolved within the next few days.”

 

In addition, a source at Sterling Bank stated, “Therefore, we are issuing the old currency.” However, there is a limit to how much we can distribute. Therefore, we are currently distributing N10,000 over the counter and via ATM.”

 

Another United Bank for Africa source has also confirmed that the bank is redeeming old notes.

 

Yes, we are already paying off the old note.

 

According to our correspondent, transport drivers have also begun to collect the old currency. Despite the fact that some still maintained a hesitant stance.

In a conversation with a bus conductor, our correspondent requested to pay with an old N1,000 note, but the conductor refused to provide change if he accepted it.

 

A trader who sells goods in Ibafo and spoke on the condition of anonymity told The PUNCH, “I am collecting the old notes and I still used them to pay a Mowe bus driver. As mandated by the CBN, anyone who does not collect old notes is in violation of the law. Even if drivers don’t collect them, gas stations now accept old bills.

 

Our correspondents who monitored the situation in banks in the Federal Capital Territory observed partial adherence to the directive of the central bank.

 

The banks complained of naira scarcity due to the regulator’s lack of new and old notes.

 

According to merchants, market women, and taxi drivers were still uncertain as to whether the notes are now legal tender.

 

A United Bank for Africa branch in Gwarimpa distributed obsolete currency over the counter, but its Automated Teller Machines lacked cash.

 

A bank representative explained that the bank would only accept old naira notes from customers who presented CBN-generated forms for the return of old currency.

 

“Dispensing? Indeed, in the bank Accepting the evidence you provided via the CBN portal. Today, we did not load the ATMs, but we will likely do so tomorrow,” she disclosed.

 

Only one of the twelve banking halls and ATMs visited by our correspondent in Wuse 2 and Wuse Zone 4 distributed old naira notes to customers.

 

At Access Bank, customers were given N5,000 in old N1,000 notes over the counter because the bank’s ATMs were not functioning.

 

At other banks, however, officials claimed there was no cash, stranding many customers.

 

An FCMB representative told our correspondent that the central bank only recognized the notes as legal tender, but had not yet begun distributing them to banks as of 1 p.m., when our correspondent visited.

 

He stated, “They (CBN) only stated that the old notes are now legal tender, but the branch had not yet received them. When the funds are disbursed, we will without a doubt give them to our customers.”

 

As directed by the CBN, banks located within the vicinity of the Federal Secretariat distributed the old notes.

 

A Zenith Bank representative disclosed that the bank was accepting and distributing the old currency, but that only N5,000 per customer was being issued.

 

Similarly, cashiers at Access Bank were observed paying customers with outdated currency over the counter.

 

Isa Abdulmumin, spokesman for the Central Bank of Nigeria, declined to comment when asked if the central bank had increased currency allocation to banks to alleviate the cash crunch.

 

Even after the CBN directive, many Abuja residents, including drivers, market women, and merchants, were hesitant to collect the old notes, according to The PUNCH.

 

A taxi driver identified only as Sunday refused to accept an old N500 bill from a passenger, citing the fact that gas stations continue to reject it.

 

“As a driver, I do not work with CBN; gas stations do not collect it, so neither will I,” he said.

 

Nonetheless, it was observed that some stores accepted the old denominations from customers.

 

Also, a petty trader identified only as Chioma stated that she was collecting old currency from customers.

 

In accordance with the CBN’s directive, commercial banks in Ilorin, Kwara State, began issuing the old N500 and N1000 to their customers on Tuesday.

 

The First Bank, UBA, FCMB, and Access banks paid old notes to their customers, contrary to what had occurred in the banks over the previous two months.

 

It was reported that each customer was permitted to withdraw up to N20,000 over the counter, but the old notes had not yet been loaded into the ATMs.

 

Also, the Governor of Kwara State, AbdulRahman AbdulRazaq, urged residents of the state, particularly merchants, to collect and spend both the old and new naira notes, as both are still legal tender in Nigeria.

 

Rafiu Ajakaye, the governor’s chief press secretary, said in a statement, “According to the ruling of the Supreme Court of Nigeria and the most recent circular of the Central Bank of Nigeria, the old naira notes remain legal tender in the country.

 

“Banks are now issuing the old naira notes officially (including N500, N1000). Therefore, I urge all state residents to spend and accept both the old and new naira notes.

 

NLC is a threat

 

Meanwhile, the NLC has reaffirmed its intention to instruct workers to stay home if the Federal Government fails to address the country’s cash and fuel shortages.

 

This was stated in a communique released by the congress on Tuesday, following the inaugural meeting of its Central Working Committee in Abuja on Monday.

 

Monday, during the opening session of the meeting, NLC President Joe Ajaero told labour correspondents that the union would direct workers to stay home if the Federal Government failed to resolve the cash crunch and fuel shortage within seven days.

 

However, a few hours after the NLC issued its ultimatum, the CBN, which had ignored the Supreme Court’s ruling on the new naira banknotes, ordered banks to accept and distribute the old denominations.

 

In spite of the new development, the congress stated in a statement on Tuesday that it could force its members to withdraw their services if the government fails to provide cash within seven days.

 

The communiqué signed by Ajaero stated, “Three major issues have engaged the nation’s attention during the period under review. These include the presidential and national assembly elections, the shortage of PMS (petrol), and the redesigning of the naira banknotes and its repercussions.

 

“The CWC has noted that elections have been held, and our general observations have been made in a previous statement. It reiterated its earlier statement that those with concerns about the election’s outcome should seek redress in court.

 

The union accused the state of refusing to implement previous agreements reached between the state government and trade unions since 2021; 20 months’ salary arrears owed to some workers stigmatized as ghost workers; declaration of 11,000 workers in the state as ghost workers and diversion of their salaries; and vandalisation of congress office and equipment by hoodlums allegedly recruited by the state government.

 

Following the intervention of certain individuals, the union announced in a subsequent statement that it was suspending the planned strike action in Imo State for two weeks, during which the state government was expected to meet the demands of workers in the state.

(TNT)