In a move to meet the January 31 deadline for the old N1,000, N500 and N200 notes to cease being legal tender, the Central Bank of Nigeria will on Monday meet with mobile money/Point of Sales agents to plan for the newly launched cash swap programme targeted at fast-tracking the withdrawal of the old notes from circulation.
The apex bank had on Friday announced the cash swap programme in partnership with super agents and deposit money banks.
It made the announcement in a circular jointly signed by the Director of the Banking Supervision Department, Haruna Mustafa, and Director, Payments System Department, Musa Jimoh.
The circular was addressed to all the DMBs, mobile money operators, super agents and agents.
Super agents are companies licensed by the CBN to recruit agents for the purpose of agency banking.
The CBN said the cash swap programme would be effective from Monday, January 23, 2022.
It said the initiative was aimed at enabling citizens in rural areas or those with limited access to formal financial services to exchange old naira notes for the redesigned notes.
The old notes are expected to be out of circulation by January 31.
The circular stated, “The old N1000, N500 and N200 notes can be exchanged for the newly redesigned notes and/or the existing lower denominations (N100, N50 and N20, etc), which remain legal tender.
“The agent shall exchange a maximum of N10,000 per person. Amounts above N10,000 may be treated as cash-in deposit into wallets or bank accounts in line with the cashless policy. BVN, NIN, or voter card details of the customers should be captured as much as possible.”
To promote financial inclusion, the CBN said the service was also available to anybody without a bank account.
It said agents might, on request, instantly open a wallet or account, leveraging the CBN tiered know your customer framework.
This, according to the bank, will ensure that this category of the populace (unbanked citizens) is able to exchange or deposit their cash seamlessly without taking unnecessary risk or incurring undue costs.
The CBN also directed agents to sensitise customers to opening wallets/bank accounts and the various channels for conducting electronic transactions.
The circular added, “Designated agents are eligible to collect the redesigned notes from the DMBs in line with the revised cash withdrawal limit policy.
“Agents are also permitted to charge cash-out fees for the cash swap transactions, but prohibited from charging any further commissions to customers for this service.
“Agents shall render weekly returns to their designated banks regarding the cash swap transactions. The DMBs shall in turn render same to the CBN on a weekly basis.
“Principals (super agents, MMOs, DMBs) shall be held accountable for their agents’ adherence to the above guidelines.”
The apex bank said cash swap agents would be readily identifiable in all local governments, particularly those in the rural areas.
The National President, Association of Mobile Money and Bank Agents in Nigeria, Mr Victor Olojo, said mobile money and bank agents would meet with the CBN on Monday to discuss the modalities for the cash swap programme.
He explained that there was a huge amount of cash in circulation and the timeframe provided for the old notes to cease being legal tender was too short.
“The liquidity outside is quite enormous. So, it will take a whole lot of concerted effort. We will be having another meeting with them (CBN officials) on Monday. We can do a lot, but that timeframe is a difficult one. But we will put in our best,” Olojo stated.
The AMMBAN president also said the normal withdrawal fee might apply to the cash swap programme, which is about two per cent of the cash withdrawn.
He, however, noted that the charges would likely be addressed during the meeting with the CBN.
1.5 million agents
Checks show that there are 1.41 million agents in the country with 1.04 million active PoS terminals as of September 2022.
However, the AMMBAN president noted that the figure was currently over 1.5 million.
He also said that the cash swap programme could not involve all PoS operators as not all of them were in the rural areas.
A CBN document notes that nearly one in two adults do not use any formal (regulated) financial services.
The document also noted that only 47.6 million Nigerians were banked, adding that about 38.1 million were financially excluded.
Speaking further, Olojo said that the issue of insecurity would likely affect the operations of some PoS agents, noting that some measures were also in place to safeguard the agents and the cash.
“Agents, by virtue of what we do, are not allowed to handle unlimited cash. There is a limit to how much should be with an agent. A standard agent also has basic insurance cover,” he stated.
He added that a verified agent was not supposed to handle more than N1m in a day.
The National Public Relations Officer of AMMBAN, Mr Oluwasegun Elegbede disclosed that the body met with officials of the CBN on January 16, 2023 to address the issue of poor circulation of the new notes.
He noted that the new circular was a result of the meeting with the CBN to ensure the speedy distribution of the new notes across the country.
“It is a response to our demand from the CBN. We met them on Monday (January 16), and part of our demand was that mobile money agencies should be brought in to ensure that the cash is circulated effectively and on time,” Elegbede said.
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