Composed Banknotes: Erring DMBs Risk 400% In Penalty - CBN

The Central Bank of Nigeria (CBN) has issued strong warning to the Deposit Money Banks (DMBs) to desist from including “composed banknotes” as deposits with the apex bank.

The Director, CBN Currency Operations Department, Ahmed Umar gave the warning in a circular issued in Abuja over the weekend, adding that the directive took effect from April 1, 2022.

The apex bank further noted that erring DMBs will henceforth face a penalty of 400 per cent of the value of the composed banknotes discovered in their deposits.

Composed banknotes are mutilated currency notes comprising 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.

Umar noted that the existence of such banknotes in the economy falsified the true value of the currency in circulation, adding that it could also be an avenue for fraudulent activities.

He said, “The management of the CBN observed with concern the increasing 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."