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CBN Warns Banks, BDCs Against Rejecting old or lower denominations of US Dollar bills.

The Central Bank of Nigeria (CBN) has instructed all banks, authorized foreign exchange dealers, and the public to accept old and lower denomination U.S. dollar bills from their customers.

The CBN stated that all banks and authorized forex dealers “must now accept both old and smaller U.S. dollar bills that are legal tender for deposits from their customers.”

The bank made this decision because market research showed that banks and authorized forex dealers were still rejecting these old and smaller U.S. dollar bills.

In a circular dated June 27, 2024, signed by Solaja Olayemi, the acting director of the currency operations department, the CBN reminded all concerned parties about an earlier circular from April 9, 2021, which clearly advised against selectively accepting deposits.

The CBN had issued directives in 2021, instructing forex dealers and deposit money banks to stop refusing old dollar bills and denominations. The CBN emphasized that this policy is still in effect and must be followed strictly.

“The outcome of the consumer market intelligence conducted by the Bank revealed the continued rejection of old/lower denominations of United States (US) Dollar bills by Deposit Money Banks (DMBS) and other authorized forex dealers.

“Kindly be reminded that the Central Bank of Nigeria (CBN) circular referenced COD/DIR/INT/CIR/001/002 and dated 9th April 2021 which explicitly frowned at this selective acceptance of deposit is still in force and must be adhered to and complied with by all relevant parties,” part of the statement reads.

The central bank of Nigeria also cautioned all authorized forex dealers against marking or stamping US Dollar banknotes, as such actions can cause these notes to fail authentication tests during processing and sorting.

Related Post:   IMF Accepts Argentina's Debt Repayment in Yuan, Marking a Historic Shift in Global Finance.

In Lebanon, banks and businesses are rejecting old, ‘bad’ USD notes. Since 2013, the US has introduced a new $100 bill, informally known in the Lebanese market as the ‘blue dollar.’ Blue dollars feature a distinctive blue 3D ribbon woven into the center of the note, a feature absent in older $100 notes, which are referred to as ‘white dollars.’

In December 2021, in response to Lebanese businesses’ growing refusal to accept white dollars, the US Embassy in Lebanon told L’Orient Today that “it is US government policy that all designs of Federal Reserve notes remain legal tender, or legally valid for payments, regardless of when they were issued. This policy includes all denominations of Federal Reserve notes, from 1914 to present.”

 

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