The Nigerian central bank has told banks and foreign exchange dealers to discontinue the practice of rejecting lower denomination foreign currencies such as the United States dollar.
The Central Bank of Nigeria (CBN) issued a stern warning, threatening to impose severe sanctions on Deposit Money Banks (DMBs) that reject old and small denominations of United States of America Dollars from customers. Non-compliance with this directive will not be tolerated and could lead to serious repercussions.
The apex bank said its earlier warning to this effect, contained in CBN circular # COD/DIR/INT/001//002, dated April 9, 2021, remained in force, and it will not hesitate to invoke the provision to penalize any contravening financial institution.
CBN reiterated the policy in a follow-up circular on June 27 signed by Ag. Director, Currency Operations Department, CBN, Mr. Mohammed Solaja.
It warned, “The Central Bank of Nigeria will not hesitate to sanction any DMB or authorized foreign exchange dealer who refuses to accept old series/lower denominations of the US Dollar bills from their customers.
Furthermore, it said, “All authorized foreign exchange dealers are advised to desist from defacing/stamping US Banknotes as such notes always fail authentication tests during processing/sorting.”
Deposit money banks and foreign exchange dealers commonly only accept dollars of higher denominations, such as $100 or $50 bills. Customers who present lower bills are usually turned back or penalized by significantly discounting the exchange rate – a practice CBN wants to end.
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 mandates banks and foreign exchange dealers to accept lower denomination US dollars. Non-compliance will result in severe penalties. Learn about the new regulations and their implications.){kind=link}