The Central Bank of Nigeria (CBN) has announced an indefinite extension of the legal tender status of the old design N200, N500, and N1,000 banknotes. In a statement signed by Director of Corporation Communications, Isa AbdulMumin, the CBN stated that the notes will continue to remain legal tender ad infinitum.
The decision to extend the legal tender status of these bank notes comes after the CBN initially introduced a redesign of the N200, N500, and N1,000 denominations in October 2022, with previously set deadlines for the old design of these denominations to cease as legal tenders.
This move, in line with international best practices, aims to prevent a repeat of earlier experiences, according to the CBN. As a result, all banknotes issued by the CBN will continue to remain legal tender, even beyond the initial 31 December 2023, deadline, in accordance with Section 20(5) of the CBN Act 2007.
The CBN is working with relevant authorities to vacate the existing court ruling on the same subject. In light of this decision, all CBN branches across the country will continue to issue and accept all denominations of Nigerian banknotes, old and redesigned, to and from deposit money banks (DMBS).
The general public is encouraged to accept all Naira banknotes, whether old or redesigned, for day-to-day transactions, and to handle these banknotes with utmost care to safeguard and protect their lifecycle. Additionally, embracing alternative modes of payment and e-channels for day-to-day transactions is also encouraged.
Background
In December, the CBN introduced new N200, N500, and N1000 notes, leading to the withdrawal of the old notes from circulation. This policy led to chaos across the country, with protests erupting in various parts of the nation. Many Nigerians encountered challenges in conducting business and making cash payments in their daily transactions.
On 8 February, the Supreme Court issued an order restraining the CBN from enforcing the deadline for the phasing out of the N200, N500, and N1000 notes pending the hearing of a lawsuit brought by three states challenging the new currency redesign policy. This order provided relief for many bank customers, as frustrated Nigerians had experienced difficulties accessing their money from ATMs.
Despite the court order, both President Buhari and CBN governor, Godwin Emefiele, did not adhere to the order. However, on 3 March, the Supreme Court ruled in favor of extending the use of old banknotes until 31 December due to the adverse impact of the policy. The court found that President Muhammadu Buhari’s directive to the CBN on the withdrawal of old notes and redesign of new banknotes without proper consultation was invalid.
Later on 13 March, the CBN directed banks to comply with the apex court’s order and accept the old notes as legal tender until the end of the year.
