The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMB) to stop including mutilated notes as part of their deposits with the apex bank.
According to the circular by Director, Currency Operations department of CBN, Ahmed Umar, the directive took effect from April 1.
Umar said that the existence of such banknotes in the economy falsified the true value of the currency in circulation.
He added that it could also be a channel for fraudulent activities.
He said that henceforth, composed banknotes discovered in the deposit of DMBs shall attract a penalty of 400 percent of the value.
“The management of the CBN observed with concern the increase number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public,” CBN said.
“The existence of composed banknotes in the economy falsify the true value of currency in circulation, and can also be avenue for fraudulent activities. “Consequently, any composed banknote discovered in the deposit of DMBs shall attract penalty of 400 percent of the value.”