Banks will face a penalty from the CBN for mutilated notes.

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Banks will face a penalty from the CBN for mutilated notes.

 

The CBN levies a penalty of N400 on banks for each mutilated N100 note.

NewsReport gathered that the Central Bank of Nigeria (CBN) has told Deposit Money Banks (DMB) not to include disfigured notes in their deposits with the central bank.

 

In a circular released over the weekend, Ahmed Umar, director of the CBN’s currency operations department in Abuja, stated this.

 

The directive went into effect on April 1st, according to the circular.

 

Composed banknotes are mangled currency notes made out of pieces from other banknotes of the same value.

 

The components of such currency notes are often assembled with the goal of receiving value.

 

Umar said that the existence of such banknotes in the economy falsified the true value of the currency in circulation.

 

He added that it could also be a channel for fraudulent activities.

 

He said that henceforth, composed banknotes discovered in the deposit of DMBs shall attract a penalty of 400 percent of the value.

 

“The management of the CBN observed with concern the increasing number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public,” CBN said.

 

“The existence of composed banknotes in the economy falsifies the true value of the currency in circulation, and can also be an avenue for fraudulent activities.

 

“Consequently, any composed banknote discovered in the deposit of DMBs shall attract a penalty of 400 percent of the value.”

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