By Nume Ekeghe

The Central Bank of Nigeria (CBN) Wednesday warned commercial banks to desist from dispensing unfit naira notes either over the counter or through Automated Teller Machines (ATMs).

The banking sector regulator also stressed that mutilation of notes would attract a fine of N50,000 or six months’ imprisonment.

The apex bank stated this in a circular titled: “Clean Note Policy,” posted yesterday on website.

The circular was signed by the Deputy Governor, Operations Department, CBN, Mr. Adebisi Shonubi, and the Director, Currency Operations Department, Mrs. Prescilla E. Eleje.

The policy, according to the central bank was aimed at ensuring an efficient circulation of premium quality bank notes and withdrawal of unfit and soiled banknotes to guarantee public confidence and usage of the naira notes as a medium of exchange.

It warned deposit money banks (DMBs), other financial institutions and the general public to desist from acts, which are injurious to the naira. Such acts, it listed include writing or graffiti, mutilating, stapling the naira, tearing or making hole of any kind, spraying, soiling or marching.

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“Offenders will be liable to a fine of N50,000 or six months’ imprisonment or both under the provision of Section 21 of the CBN Act, 2007,” it added.

Classifying banknotes into nine levels, the policy stipulated that banks must ensure that they process their banknotes using registered processing companies and classify them into fit and unfit.

It further stated: “Any counterfeit notes discovered are to be returned to CBN. Only the banknotes which have been authenticated – verified for counterfeit and free from unfit notes, according to CBN standard – will be issued over the counter by banks or through their cash dispensing machines.

“Unfit banknotes shall not be re-circulated by DMBs and CPCs. However, a penal charge of N12,000 per box, or any amount determined by the management of the Bank, shall apply for the deposit of unsorted banknotes.

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“In addition, penalties as may be determined by the Bank, shall apply for the re-circulation of unfit banknotes.

“There are machines that accept, count or sort banknotes automatically into fit, unfit, suspect or counterfeit. Only cash processing machines, which have been duly configured, and approved by the Bank shall be used by CPCs.

“The CBN shall set fitness standards/parameters for the processing machines by using test packs, which may be changed periodically.

“The test packs shall serve as the reference notes and may be reviewed from time to time. Against this background, the CBN on a regular basis shall monitor compliance as set therein.”

The circular described an unfit note as one that is badly soiled or there is a general distribution/localisation of dirt.

According to the apex bank, unfit note presents a limp/rag appearance due to excessive folding that results in the breakdown of the texture and structure of the note.

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The bank also noted that unfit note has added image or lettering marked on it or there is a hole that is more than 10 mililmetre

It also stipulated that ATMs deployed by banks and other service providers are to be configured to dispense and accept only genuine banknotes in all denominations.

“The ATMs shall dispense notes that have been duly checked for authenticity and fitness according to the Bank’s standard and operators whose ATMs contravene this provision shall be sanctioned according to section 20 of the CBN Act. “Similarly, DMBs and service providers whose ATMs receive or dispense counterfeits or materials other than naira banknotes shall be liable according to section 20(4) of CBN Act 2007”.