The Central Bank of Nigeria has reportedly directed banks to begin collecting old N500 and N1,000 notes from the public as soon as possible.

The maximum amount that banks can collect, however, is N500,000.

Protests across the country have been rocking over the scarcity of the new naira notes made the CBN order banks to collect higher denominations after meeting with banks’ leaders.

According to reports, the old currencies were no longer legal tender.

According to a bank source, the apex bank ordered the banks to collect the funds instead of going to the CBN office due to difficulties in gaining access to the bank.

“Go to your bank, but fill out the form first,” a CBN official advised. Stick with the reference code you created. Banks will collect your code from you. However, if it exceeds 500,000, you will go to the CBN and deposit it.

“Go to your bank but fill out the form before you go. Go with the reference code you generate. With your code, banks will collect it from you. But if it is more than 500,000, you will go to the CBN and deposit it,” reportedly said.

The Apex Bank responds:

But in his response, Mr. Osita Nwanisobi, CBN Director of Corporate Communications, said the apex bank did not give such directive.

“The attention of the Central Bank of Nigeria has been drawn to some fake and unauthorized messages quoting the CBN as having authorized the Deposit Money Banks to collect the old N500 and N1,000 Banknotes,” the apex bank said.

“For the avoidance of doubt, and in line with Mr. President’s broadcast of February 16, 2023, the CBN has been directed to ONLY reissue and recirculate the old N200 banknotes and this is expected to circulate as legal tender for 60 days up to April 10, 2023. Members of the public should therefore disregard any message and/or information not formally released by the Central Bank of Nigeria on this subject.

Understandably, foreign exchange shortages have become more pronounced as economies in Nigeria face ongoing high import price pressures and higher debt servicing requirements

Customers received a message from the bank informing them that the naira Mastercard would no longer be able to be used for foreign transactions as of Saturday, December 31, 2022.

Additionally, neither overseas Point of Sales (POS) transactions nor Automated Teller Machine transactions may be made using the Naira Mastercard (ATM).

The statement reads, “We write to inform you that you will no longer be able to use your naira Mastercard for international online and POS transactions effective 31st December 2022.”

Meanwhile, GTBank said account holders can conduct their international transactions through the financial institution’s dollar card.

The term “bank representative office” refers to a banking unit that does not conduct banking operations and is located in a different location from the bank’s headquarters.

In a circular titled: “Circular to Representative Offices of Foreign Banks in Nigeria, Stakeholders and the General Public”, the CBN said, “The Central Bank of Nigeria (CBN) is empowered by Section 8 of the Banks and Other Financial Institutions Act 2020 (BOFIA) to mandate foreign banks to seek prior approval of the CBN before they can operate in Nigeria.

This provision, coupled with requests from foreign banks, law firms, and financial consultants, among others, on the requirements for operating representative offices of foreign banks in Nigeria, has made it pertinent to develop guidelines prescribing the regulatory requirements.”

“Accordingly, the draft guidelines have been developed to provide guidance to stakeholders, particularly foreign banks, seeking to operate in Nigeria,” the bank added.

The exposure draft of the Guidelines was issued for comments and observations.  The bank said, “Your comments should be addressed to the Director, Financial Policy and Regulation Department, CBN, with soft copies sent via email to fprd_cedg@cbn.gov.ng within three (3) weeks from the date of this circular, please.”

Some of the guidelines requires the CBN Governor to receive a formal application from foreign banks and other financial institutions seeking to open an authorized representative office in Nigeria, along with a memorandum of understanding and proof of name reservation with the Corporate Affairs Commission amongwithother documents.

The CBN would require that foreign banks pay a non-refundable application charge of N5,000,000 and a non-refundable license fee of N10,000,000.

Further, approved Representative Offices must submit to the Director, Banking Supervision Department of the Central Bank of Nigeria, among other documents, a certificate from a recognized audit firm confirming that no income was received or accrued to the Nigeria office during the fiscal year.

Foreign banks would not be permitted to perform services classified as banking activity in Nigeria. They would also be barred from engaging in any commercial or trading activity that could result in the production of invoices for services delivered.