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CBN releases new guidelines to banks

The Central Bank of Nigeria (CBN) says it has published guidelines for the disbursement of lower denominations in Naira through microfinance banks (MFB) throughout the country.

The bank’s director, corporate communications department, Isaac Okorafor, announced this in a statement in Abuja on Thursday.

Okorafor said this development was contained in a circular issued by the director of the Bank’s Currency Operations Department, Ms. Patricia Eleje, in Abuja on Thursday.

He explained that the circular indicated that all microfinance banks must have a Compound Risk Rating (CRR) above the average in the most recent objective Risk-Based Supervision (RBS) exam before being considered for the scheme.

He explained that the measure was to ensure that only MFB participated with good corporate governance practices, reports NAN.

“Meanwhile, the participating MFBs must be willing to accept a combination of new and other bills, and that the MFBs will give 20 percent of any withdrawal on smaller denomination bills subject to a maximum of N50,000.

“When the beneficiaries withdraw more than once in a day, the circular says that the disbursement will only apply to one transaction per day.

“Similarly, MFBs can exchange notes subject to a maximum of N50,000 for customers with bank accounts and N10,000 for customers without bank accounts.

“In that situation, banks should not exchange for the same beneficiaries more than once a week,” he added. According to him, MFBs must keep a record of the amounts received from the CBN through their corresponding commercial banks.

Okorafor said the MFB must also keep another record of the beneficiaries of the lower denomination notes, as well as ensure that ATM receipts contain a breakdown of the denomination of the currency to customers with accounts.

“The circular also warned the MFB against street sales, hoarding or the use of funds obtained under the intervention for any other purpose.

“It also instructed banks to establish effective control measures to ensure that tickets disbursed to customers with or without accounts are not sold.

“Also, the circular ordered banks to return weekly, and monthly disbursements to CBN branches, where the intervention would be monitored periodically, and appropriate sanctions would be applied to the wandering MFBs,” he said.