The Central Bank of Nigeria (CBN) has introduced a Clean Note Policy to solve the issue of mutilated naira notes.
In a circular issued by the CBN on Friday, the initiative was in a bid to enhance the availability of clean notes and effect expeditious withdrawal of dirty notes from circulation, noting that banks whose Automated Teller Machines (ATMs) issue mutilated notes would be sanctioned.
It said Deposit Money Banks and Cash Processing Companies making deposits at the CBN should classify their cash deposits into fit and unfit notes.
The CBN said the unfit notes should be sorted, classifying mutilated notes differently.
The apex bank said a banknote would be considered unfit for recirculation if it was badly soiled or if there was a general distribution/localisation of dirt.
It added that other features that could make a note classified as unfit were if the note presented a limp/ragged appearance due to excessive folding that resulted in the breakdown of the texture and structure of the note, or if the note had added image or lettering marked on it, or if had a hole that was more than 10 mm.
The circular read in part: “Other features that classify notes as unfit are torn parts of the banknote that are re-joined with adhesive tape in a manner that tries to preserve as nearly as possible the original design and size of the note; reduction in the original size of the note through wear and tear or fire, rodents and chemicals; perforation of the notes; and loss of more than half of the original size of the banknote.
“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 CBN shall apply for the deposit of unsorted banknotes.
“In addition, penalties as may be determined by the CBN, shall apply for the re-circulation of unfit banknotes.”
The CBN said offenders would 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.
According to the circular, writing or graffiti paintings, mutilation, stapling, tearing or making hole of any kind, spraying, soiling and matching is highly offensive and punishable.
The CBN said it would ensure that the Automated Teller Machines deployed by DMBs and other service providers were configured to dispense and accept only genuine banknotes in all denominations.
It added that the ATMs would only dispense notes that had been duly checked for authenticity and fitness according to the CBN’s standard and operators whose ATMs contravene this provision shall be sanctioned in line with the existing guideline.
“The CBN and DMB shall continue to receive mutilated notes from the public. The procedures for the treatment of mutilated notes and the notes for exchange are as enshrined in the Central Bank Operational Manual for the Operation of Mutilated Notes,” the circular stated.