CEM REPORT | The Central Bank of Nigeria (CBN) has warned Deposit Money Banks (DMBs) against circulating composed (mutilated) banknotes which is part of their deposits with the apex bank.
This warning is contained in a circular titled, ‘Treatment of Composed Banknotes’, issued to all deposit money banks on March 31, 2022, and signed by the apex bank’s Director, Currency Operations Department, and can be seen on its website.
In the circular to DBMs, the CBN expressed concerns over the increasing number of these composed banknotes which the members of the public usually request for their replacement.
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CBN said the existence of composed or mutilated bank notes in the economy falsifies the true value of currency in circulation and can also be avenue for fraudulent activities.
Composed banknotes are mutilated currency notes that comprise of several parts of different banknotes of the same denomination. The parts of such currency notes are usually put together with the intention of receiving value
The circular from the CBN reads, “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.
“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 per cent of the value.
‘’This circular takes effect from 1st April 2022.’’
