Banks resume payment of old N500, N1000 notes

Following the Supreme Court judgment, which extended the validity of the Central Bank of Nigeria (CBN) currency redesign policy to December, some deposit money banks have started paying out the old notes.

Checks showed that some commercial banks in the City of Kano and Abuja have commenced paying out the old N500 and N1000 notes.

While some branches of Guaranty Trust Bank (GTB) issued out old notes, some others like Polaris bank in Abuja had not commenced as of the time this report was filed.

A member of staff confided in our reporter that only the old N200 notes were still being issued, “as we do not have any new directive on what to do yet.”

Sources at GTB said they received a directive from their management to begin paying old notes in their vault.

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“The problem is that taking the old notes from customers will require the CBN form as we don’t have any directive in that regard,” the source said.

As of the time of this report, CBN is yet to officially issue a bank-wide circular instructing the Deposit money bank to comply.

Economic experts have asked President Muhammadu Buhari to direct the Governor of the CBN, Godwin Emefiele, to obey the judgment on the validity of the old naira notes.

An economist, Paul Alake, had said there needs to be more clarity on how the old N500 and N1000 notes return into circulation.

He said the judgment would not be impactful if the old Notes were not released by the CBN back into the banking system.

“If the money is not released in the financial sector by the Central Bank of Nigeria, the judgment may not have any effect.”

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In a unanimous judgement, a seven-member panel of justices presided by Justice Inyang Okoro, on Friday, held that the directive by President Muhammadu Buhari to the Central Bank of Nigeria (CBN) for the redesigning and withdrawal of old notes of N200, N500 and N1,000, without consultation with the states, the Federal Executive Council (FEC) and the National Council of State and other stakeholders, was unconstitutional.

The apex court observed that no reasonable notice was given before the implementation of the policy as provided under the CBN Act.