Barely three days after the Central Bank of Nigeria declared old N1,000, N500 and N200 notes as legal tender, Deposit Money Banks say they are beginning to run out of the old currencies.
The development led to severe hardship and pains for several bank customers seeking to withdraw funds on Wednesday.
The CBN had on Monday directed banks to pay out and accept the old notes from their customers.
This came after the President, Major General Muhammadu Buhari, said he did not stop the CBN and the Attorney General of the Federation Office from complying with the Supreme Court judgement ordering that old naira notes should remain legal tender till December 31, 2023.
However, commercial banks which began the disbursements of old N1,000, N500 and N200 notes to their customers on Tuesday told The PUNCH on Wednesday that had started running out of the old currencies.
This made several bank customers to become stranded in banking halls as well as in major cities and towns.
While some bank officials said their stocks of old notes were beginning to run low, others said they had exhausted the old currencies in their vaults.
This happened amid an acute shortage of new notes which led to long queues in banking halls and Automate Teller Machine galleries in several cities and towns.
The CBN which has kept mute on whether it will release more old notes into circulation, is reportedly opposed to the recirculation of the old currencies due to its determination to push the cashless policy initiative to a logical end
Multiple sources close to the CBN told one of correspondents on Wednesday that the apex bank might not release the old notes in its custody to banks anytime soon, arguing that doing so might be tantamount to reversing the “progress” it had achieved on the cashless initiative.
Also, a senior bank executive who spoke on condition of anonymity, said, “The CBN did not print enough new notes and does not want to return the old notes it has collected because it is still driving its cashless policy.”
Also, a top industry executive close to the CBN said the apex bank might not return the old notes to banks because it would reverse its cashless policy.
The managing director of a tier-2 bank said the CBN had yet to officially communicate to banks on whether it would release old notes to them or not.
He said, ‘”We don’t know if the CBN has destroyed the old notes in its custody or not. As we speak, we don’t also know if it will release the old notes to banks again but the truth is banks don’t have much of these old notes in their vaults. Sadly, customers are not depositing much again.”
Many of us are expecting the CBN to disburse the old notes before Saturday. However, we are concerned they may not do so to curtail vote-buying on Saturday.
Findings by The PUNCH on Wednesday revealed that several banks had run low on old notes amid a scarcity of new notes.
Several banks said on Wednesday their old notes stock had gone down.
An official of FCMB branch in Ikeja told The PUNCH its stock of old notes had been exhausted by 2pm.
“We exhausted our old notes by 2pm. Our head office has yet to give us any fresh supply because it does not have. We can only hope the CBN will supply soon,” he said.
Meanwhile, visits to the branches of the United Bank for Africa Plc, Heritage Bank and First Bank of Nigeria Limited in the Navy Town, Ojo and Alakija areas of Lagos State on Wednesday indicated that none of the banks had cash to dispense to their customers.
At the First Bank branch in Navy Town, officials said the centre could not determine when cash would be brought to the branch.
The Heritage Bank branch inside Mammy Market at Navy Town and the UBA at Alakija did not also dispense cash via over-the-counter and Automated Teller Machines.
Meanwhile, an accountant at a clearing and forwarding firm in Apapa, Lagos, O’leke Japhet, who resumed work on Tuesday after several days of working from home, said the situation was worrisome.
Findings showed the situation was the same in other cities. This made several customers to be stranded.
A First Bank official in the Akure branch, Ondo State, who spoke with The PUNCH on condition of anonymity, said the centre had run out of both the old and new notes.
He said, “Today, we paid N5,000 to each customer, yesterday, we paid N20,000; on Monday, we did N20,000. We have run out of both old and new notes now.
“People are not depositing old notes again. A branch that gets close to N100m in cash deposit or more, can hardly boast of N1m now. Most of our branches are advising customers to use alternative channels to transfer funds.
In the same vein, an official of UBA in Alagbako branch, Akure, Ondo State, said the lender did not have enough funds in its vault.
He said, “There is no money, we do not have enough cash, we barely opened till 12:00pm today because we had exhausted our cash. Customers are no longer bringing in funds via deposits and the CBN is not giving banks money.”
Furthermore, an employee of Access Bank Plc, who works in the Lagos head office, said, “Banks do not have enough funds again. We got the circular from the CBN that old notes are now legal tender. The policy on the ground is to give customers N20,000, but because of the scarcity of cash, it became N5,000”.
Meanwhile, some economic analyst have reacted to the development.
The Director of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said, “What I think should happen is to first ascertain the validity of the statement that all the old notes have been recycled because I do not think that all that money should have been destroyed so quickly, the President needs to carry out an audit.
“Secondly, all along I expected that the CBN should have been printing more currencies because we have been on this for some time, so I expected that by now the amount of new currency in circulation should have increased.
Yusuf expressed concern that there might be an attempt to sabotage the Supreme Court’s judgement.
He added, “I hope there is no deliberate attempt to sabotage the judgement of the Supreme Court because we cannot rule it out, however, it is for the president to ensure that this is done because the banks cannot do it and the CBN is replying very reluctantly. So, the President will have to validate all these claims by doing an audit of the old currency that is available to be sure that indeed all the old notes have been destroyed.”
Meanwhile, findings showed some commercial banks along Isolo and Airport Road in Lagos disbursed cash to their customers on Wednesday.
Findings showed that the First Bank branch in Isolo, Lagos, paid its customers, but there was a large crowd of customers on queues. Also, the ATMs did not dispense cash.
Also, a Polaris Bank branch along College Road in Isolo disbursed old notes.
Wema Bank and FCMB adjacent to the Polaris Bank disbursed cash but the queues were very long.
Over-the-counter withdrawals of old notes increased in the Federal Capital Territory on Wednesday but several banks ran out of cash before their closing time.
The bank branches visited include Globus Bank, First City Monument Bank, Access Bank, United Bank for Africa and GTBank located in Wuse.
At Globus Bank, restrictions were not given to withdrawals made by customers.
But at Access Bank, only a withdrawal of N5,000 in old N1,000 notes was allocated to each customer.
A GTBank official said, “We are only disbursing from the small amount we have in our vault; that is why there is a withdrawal limit. We are hopeful that before the weekend we will receive a substantial amount from the CBN.”
Meanwhile, all Automated Teller Machine stands visited were empty.
But some petty cash traders and market women still expressed uncertainty about the CBN directive with many waiting for an announcement by the President.
An Okada rider who refused to collect the old notes from a passenger queried “Has Buhari announced that we should use the notes? I am not collecting it until he announces it.”