The Central Bank of Nigeria (CBN) has set a timeline of
between February 28 to May 31, this year for replacement of
the existing currency with new ones. It also gave an
ultimatum of March 31, to all three tiers of governments
that have stakes in bank to dilute or wind down their
shareholdings to a maximum of 10 per cent.
These were the highlights of the Bankers’ Committee meeting
held yesterday in Lagos. The Bankers' Committee is an
association of the chief executives of banks and selected
financial institutions, which meets bi-monthly to discuss
the state of affairs in the industry.
The Governor of the CBN usually chairs the meeting.
Briefing newsmen shortly after the meeting, CBN’s Deputy
Director, Banking Supervision Department, Mr. Godwin
Oladejobi said the CBN has put in place measures that would
facilitate the disbursement of the new currencies.
By next Wednesday the apex bank is expected to officially
launch into the economy its newly re-designed notes in
addition to new coins series of N2 and existing 50 kobo and
N1.
The redesigned lower denomination notes of N5, N10 and
N50 are printed on vanished paper substrate, while N20 note
in printed in polymer. Oladejobi said the CBN has directed
banks to set up special desk where they can attend both
their customers and non-customers, stressing that banks have
been enjoined to ensure that the everybody have access to
the new currency. "As part of the ongoing currency
restructuring by CBN, by February 28, there will be a formal
launching of the new currency.
From February 28 to ending of May, opportunity would be
given for exchange of old for new currencies. Each note
would be translated in Yoruba, Hausa and Ibo to make people
understand better. "CBN is seeking banks' cooperation to
facilitate quick disbursement of these new currencies. Banks
are directed to attend not only to their customers but
customers of other banks. They are also expected to assist
in passing handbills and postals so that everybody will be
aware.
Oladejobi, who briefed newsmen alongside the Managing
Director of Skye Bank Plc, Mr. Akinsola Akinfemi, his
counterpart at Ecobank Plc, Mr. Ofiong Ambah said the CBN
Governor Professor Chukwuma Soludo, has appealed to banks
and the general public to guide against anything that would
delay the smooth disbursement of the currency, adding that
CBN would open desk offices where people can be attended to.
This in a nutshell, means that the existing notes would
cease to be legal tender by May 31, 2007. The affected notes
will however, continue to circulate side by side with the
new ones. The new coins are expected to come in smaller
sizes and be lighter in weight so as to make it convenient
to carry.
The essence of the currency reform, is to encourage the
use of coin and discourage the rounding up of prices to the
nearest value while achieving cost effectiveness, durability
and efficiency without compromising security and public
acceptability of the new currencies.
Meanwhile the CBN has given a directive that all
consolidated government shareholdings in banks be watered
down to 10 percent by the end of next month. It would be
recalled that CBN had during the banking sector
consolidation exercise issued a directive that no government
should have more than 10 percent equity investment in banks,
stressing that such holdings scaled down to 10 per cent
before end of this year.
The CBN Deputy Director noted that some banks have
complied, while others have not. Over the years it has been
observed that government holding leads governance problem
which, has led to the collapses of a number of banks
especially those in which State Governments have major stake
due to their over bearing influence. Skye bank MD disclosed
CBN's intention to raise $1 billion for the African Finance
Institution through private placement.
