The Central Bank of Nigeria has warned microfinance banks in the country against hawking and hoarding of lower denomination currencies under its latest intervention.
The CBN gave this warning, when it released its guidelines for the disbursement of lower denominations of the naira through microfinance banks across the country.
It also warned the MfBs not to use them for other purposes
A circular issued by the Director, Currency Operations Department of the bank Mrs Patricia Eleje, on Thursday, said all microfinance banks must have a composite risk rating of above average in the most recent Risk Based Supervision target examination before they would be considered for the scheme.
This, according to the CBN, was to ensure that only MFBs with good corporate governance practices took part.
“The participating MFBs must be willing to accept a mixture of new and other banknotes, and that the MFBs shall give 20 per cent of any withdrawal in lower denomination notes subject to a maximum of N50,000,” it stated.
Where beneficiaries withdrew more than once in a day, the circular said that disbursement would only apply to one transaction per day.
The MFBs were allowed to exchange notes subjected to a maximum of N50,000 for customers with bank accounts and N10,000 for customers without bank accounts.
In that situation, the banks must not exchange for same beneficiaries more than once a week, it stated.
Also, the MFBs were to maintain a register of amounts received from the CBN through their correspondent commercial banks.
They must also maintain another register of the beneficiaries of the lower denomination notes as well as ensure that withdrawal teller slips contained breakdown of the denomination of the currency to customers with accounts.
It also instructed the banks to put in place effective control measures that would ensure that banknotes disbursed to customers with or without accounts were not sold.
Furthermore, the circular directed the banks to render weekly and monthly disbursement return to the CBN branches where the intervention would be monitored periodically, and appropriate sanctions applied to erring MFBs.