CBN Enforces Acceptance of All US Dollar Denominations

The Central Bank of Nigeria (CBN) has issued a strict directive to Deposit Money Banks (DMBs) and authorised forex dealers, mandating the acceptance of old and lower denominations of United States Dollar (USD) bills from customers. This move comes after consumer market intelligence revealed ongoing selective rejection of these bills by financial institutions and forex dealers.

In a circular dated June 27, 2024, and signed by Solaja Mohammed-J Olayemi, the Acting Director of the Currency Operations Department, the CBN reiterated the necessity for compliance with its directive issued on April 9, 2021, which prohibits the selective acceptance of deposits. The CBN emphasised that this earlier directive remains in force and must be strictly adhered to.

The circular highlighted findings from consumer market intelligence indicating continued rejection of old and lower denominations of USD bills. It reminded all relevant parties that the directive from April 2021 explicitly prohibits selective acceptance of deposits and requires full compliance.

The CBN has warned that it will impose sanctions on any DMB or authorised forex dealer that refuses to accept old series or lower denominations of USD bills. This measure aims to ensure uniform handling of foreign currency deposits and prevent unnecessary rejection faced by customers.

Additionally, the CBN advised authorised forex dealers to cease the practice of defacing or stamping USD banknotes, as such actions can result in these notes failing authentication tests during processing and sorting.

This directive underscores the CBN’s commitment to enforcing uniformity in the handling of foreign currency deposits and ensuring that customers can deposit USD bills without facing rejection. All DMBs and authorised forex dealers have been called to immediate compliance to uphold the integrity of the banking system.

In 2021, the CBN had already ordered DMBs and Bureau De Change (BDC) operators to accept old and lower denominations of USD bills as legal tender, following numerous public complaints about the rejection of these bills by banks and other forex dealers. The current directive reinforces this mandate, emphasising the CBN’s resolve to maintain consistent and fair currency practices.