CBN will sanction banks for depositing mutilated banknotes

the Central Bank of Nigeria (CBN) has announced plans to penalize Deposit Money Banks (DMB) for the inclusion of mutilated notes in their deposits at the main bank. The CBN made it known over the weekend in a circular signed by Ahmed Umar, director of the bank’s foreign exchange department. Umar said that the new directive came into force on April 1. The bank expressed concern about the increase in the number of compound banknotes in circulation. Composite banknotes are mutilated banknotes consisting of several parts of different banknotes of the same denomination. Parts of such currency bills are usually put together to receive value. Umar said that the existence of such mutilated banknotes falsified the true value of the currency in circulation, adding that it could also encourage fraud. As of April 1, compound banknotes discovered at the DMB depot will be fined 400 percent of the value, the CBN official said. “CBN management noted with concern the increasing number of composite notes deposited by DMB and the request for replacement of such notes by the public,” CBN said. “Consequently, any compound note discovered in the DMB depot will be penalized with a fine of 400 percent of the value.” By implication, the CBN will start imposing a fine of N4,000 for each mutilated N1,000 note discovered in the banks’ deposits at the main bank. ALSO READ: CBN warns banks not to deposit ‘composite’ bills In recent years, the CBN has been at the forefront of ridding the economy of defective and mutilated banknotes. In February 2020, the bank said that around 100 tonnes of poor quality naira notes were being generated as waste and destroyed weekly by open burning at its 12 disposal centers across the country. Read More Related News Here Let here it in the comment below if you do have an opinion on this; CBN will sanction banks for depositing mutilated banknotes