Wednesday , June 12 2024
Why Nigerian Banks Will Reject £20, £50 Banknotes From January 1 2022

Why Nigerian Banks Will Reject £20, £50 Banknotes From January 1 2022

Following the decision of the Bank of England (BOE) to phase out its £20 and £50 paper banknotes, with effect from September 30, 2022, there are indications that various branches of Nigerian banks may reject them as legal tenders from January 1, 2022.

Nigerian banks have issued a notification that they would start rejecting old £20, £50 Notes after fixing December 31 as deadline for customers to deposit their notes.

In a directive statement issued by banks, customers have been warned that banks will no longer accept the old notes at the end of this year.

The Bank of England, UK, had introduced a new polymer design of £50 note into circulation effective June 23, 2021.

In a notice to its customers on Thursday, November 4, 2021, the management of Keystone Bank Limited said its branches “will only accept polymer notes from all customers.”

However, no reason was given for the decision to stop accepting the notes nine months before they cease to have legal tender status with the issuing

Nigeria changed to polymer banknotes on February 28, 2007, when it introduced the 20 Naira denomination notes to test acceptability. Satisfied with the public acceptance of the notes, the five, 10, and 50 Naira notes late 2009.

Read More: Foreign, Local Investments In Nigeria Rise By 113% In 9 Months

In a notice by the BOE, on September 29, 2021, had in a statement given a one-year notice to withdraw the legal tender status of the paper banknotes after 30 September 2022.

The statement urged anyone who has notes estimated to be worth approximately £9 billion worth of paper £20 and £15 billion worth of paper £50 notes still in circulation “at home to spend or deposit them at their bank or Post Office.”

The notes on return “are being replaced with the new polymer £20 notes featuring J.M.W. Turner, and polymer £50 notes featuring Alan Turing.”

The BOE assured that after the deadline, “people with a UK bank account will still be able to deposit withdrawn notes into their account. Some Post Offices may also accept withdrawn notes as payment for goods and services or as a deposit to an account accessed via them.”

Explaining the decision head of the date, the BOE’s Chief Cashier Sarah John recalled that the bank has in recent years been changing its “banknotes from paper to polymer because this makes them more difficult to counterfeit, and means they are more durable. The polymer £20 featuring the artist J.M.W. Turner, and the polymer £50 featuring the scientist Alan Turing are now in wide circulation, and we are in the process of withdrawing their paper equivalents. So we want to remind the public that they have one year from today to spend their paper banknotes.”

The new polymer £20 was first issued on 20 February 2020, and the polymer £50 note was first issued on 23 June 2021, the BOE added, noting that these notes complete its first polymer series.

“The introduction of polymer banknotes allows for a new generation of security features which make them even harder to counterfeit. The notes are also resistant to dirt and moisture and so remain in better condition for longer. These notes also have tactile features that allow the blind and partially sighted to use them.”

Besides helping to stem currency counterfeiting, the Central Bank of Nigeria (CBN) explained some years ago that it is also to reduce the cost of managing the nation’s legal tender, noting that since 1996, 26 percent of its annual budget went into issuing, replacing and general currency operations.

According to Wikipedia, polymer banknotes were first issued in 1988 as banknotes by Australia, which now uses polymer exclusively and is about to launch a new series of notes, starting with the $5 bill in September.

About Bukola Olanrewaju

Check Also

Fitch Upgrades Fidelity Bank’s Rating to ‘Positive’

Fitch Upgrades Fidelity Bank’s Rating to ‘Positive’

Fitch Ratings has revised the outlook on Fidelity Bank PLC’s LongTerm Issuer Default Rating (IDR) …

Leave a Reply

Your email address will not be published. Required fields are marked *