The question of whether the Central Bank of Nigeria’s deadline today to phase out the old naira notes has been extended or suspended as a result of a Supreme Court injunction obtained by some northern governors bewildered Nigerians, particularly bank customers.
On Wednesday, the Supreme Court decided that the deadline should be postponed until the case brought before it by the governors of Kaduna, Kogi, and Zamfara States is decided.
The case will be heard by the court on February 15. However, in a response to the suit later on Wednesday, Abubakar Malami, SAN, the Federation’s Attorney General and Minister of Justice, stated, among other things, that the Supreme Court lacked jurisdiction over the matter.
However, on Thursday, a day before the deadline, commercial banks in the country and bank customers were confused about whether the old N1000, N500, and N200 would become illegal tender on Friday (today) or if they would remain so until the Supreme Court examines the governors’ lawsuit.
On condition of anonymity, because they were not permitted to discuss the matter, a number of senior bank executives told reporters that they were unsure whether the Friday deadline would be met.
They based their argument on the fact that the banking sector regulator, the CBN, had not yet issued any instructions to banks.
Additionally, they argued, the governors were not parties to the banks’ lawsuit.
Unwilling to be quoted, an Access Bank executive responded when contacted, “I cannot say yes or no.” You are aware that there is a judgment from the court; therefore, for the time being, there is a judgment from the Supreme Court; however, we have not received any additional communication regarding it from the CBN.
In response to questions from The PUNCH, another top Ecobank source stated, “We don’t know what will happen yet.” We will still collect old naira notes on Friday, as you know the deadline is, but after that, we are unsure what will happen.”
In addition, a Zenith Bank executive who spoke with The PUNCH on condition of anonymity stated, “As it stands now, Friday is the deadline but there is a Supreme Court judgment so, we don’t know what will happen.” The CBN has not issued a new circular announcing an extension at this time.
Additionally, a Polaris Bank executive stated that the lender was awaiting CBN communication regarding the matter.
The official stated, “As it stands, we don’t know whether Friday is the deadline for the phasing out of old notes or we need to wait until next week when the Supreme Court will sit on the matter.”
A top executive of a tier-2 bank also said, “There has been no directive from the CBN on the matter, as to whether to stay with the February 10th deadline or not,” when asked about the subject. New notes are not arriving from the CBN as expected at the moment.
The banks only have a small number of old notes in their vaults that they are unable to even payout. Unfortunately, rather than loading their ATMs three to four times per day, some banks only load them once per day due to a lack of new notes.
On Thursday, several banks remained closed, and cash-strapped Point of Sale operators shut down their businesses.
As the situation got worse, officials said that Nigerians might have to deal with a cash shortage in the coming days.
According to some bankers, the CBN had restricted the amount of cash it distributed to banks.
The bankers, who spoke on condition of anonymity, stated that the Central Bank of Nigeria (CBN) could do more to alleviate Nigerians’ cash shortage.
Our correspondent talked to one of the bankers, who said, “The CBN is hoarding supply to branches.” The brand-new naira notes were not made available. They are currently providing banks with old lower denominations but in small quantities.
“Cash is limited,” said an additional banker. We know it’s all about financial inclusion, but there will be problems if people can’t use their accounts for what they were intended for and want us to go all tech. CBN has additional cash supply management options.
A banker stated, “People are not moved by the CBN’s deadline,” dismissing any notion of pressure. In contrast to the previous one, in which individuals were confident that they would receive the new notes in a swap or N500 million in old notes and receive the same amount in old notes, this one did not. People don’t change. I haven’t seen any evidence that people will comply, but we’ll see how tomorrow goes.
One of the bankers responded, “No, they are not,” when asked if customers were bringing in their old naira notes before the deadline. In fact, banks are pleading with customers to bring cash so that they can fund cash activities.
Emese, a different banker, stated, “The reactions have been mixed.” The ruling by the Supreme Court on the subject is one example.
Cash is being brought in by customers. Between the hours of two and three, there isn’t much of a crowd. People started coming into the bank today (Thursday) to deposit their cash.
“It is not what we expect, but it is in line with the CBN cashless policy,” an employee of one of the leading banks added. It is not going to be a case of returning one trillion dollars to circulation.
Major-General Muhammadu Buhari, the current president had pleaded with Nigerians to give him seven days to resolve the naira crisis on Friday of last week.
However, as the crisis persisted on Thursday, Nigerians faced difficult times. Even after the naira shortage that has affected the nation’s subsided, business owners and traders have stated that they would think about keeping their money at home rather than using banks.