New Notes Saga: Supreme Court Ruling Leaves Uncertainty As Banks, Businesses Wait On CBN

With the Supreme Court decision prolonging the legal tender status of the old naira notes through December 31, 2023, stakeholders in the financial sector and banks are divided over their re-issuance.

Bank clients, financial analysts, and company owners have asked for the immediate re-issuance of the old naira notes by the Supreme Court, despite banks’ claims that they can’t start doing so until the CBN gives them the go-ahead.

However, when contacted by reporters, a few bank employees claimed that after receiving a direction from the CBN, the banks would comply.
Under the condition of anonymity, a representative of Access Bank stated that the banks would follow CBN directives rather than Supreme Court orders.

He argued that “Banks in Nigeria are heavily regulated, and we only listen to what the CBN says. Despite the ruling, we still need to hear from our regulator”, he said.  He claimed that the CBN answers to the President and that the President has decided whether or not the top bank will comply.

“We all know what the President has said on the matter. The CBN takes its orders from the Presidency. So I am sure any action by CBN would be a directive from the President. However, a different bank representative from Keystone Bank implied that nothing could be done against the CBN. “When they meet on Monday, they will decide what happens next, and we will likely start receiving additional updates from our management,” she said.

Nevertheless, a second bank official, who also begged to remain unnamed, claimed that the bank had not been given access to the old notes despite the directive. He said, “We don’t have the old notes, and we are not answerable to the Supreme Court. Therefore, the CBN must  send  a circular before we can implement any directive.”

Financial analysts, however, demanded that the Supreme Court’s ruling immediately reissue the old Naira notes. Commenting in this regard, Tajudeen Olayinka, Chief Executive Officer Wyoming Capital, and Partners words were;

“I think the immediate impacts are:  restoration of cash/liquidity to the system; improvement in circular flow; and obliteration of initial objectives of CBN to remove illegal money/money in wrong hands; to remove distortions; and to reduce inflationary pressure. But, unfortunately, CBN got the whole thing wrong by introducing a policy without good knowledge of policy/system dynamics, and it is sad that it started and ended in ignominy.”

A PoS operator who only went by Darlington said that the Supreme Court’s decision was positive news for the general public. However, he claims that most Nigerians have recently chosen to trade by barter to survive. Darlington added that this would reduce the excessive fees operators currently charge clients. That indicates that we will resume charging N100 for each transaction.