The Central Bank of Nigeria (CBN) has ordered Deposit Money Banks (DMB) to stop including mutilated notes as part of their deposits with the apex bank.
Director, currency operations department in the Apex Bank, Ahmed Umar in Abuja, said this in a circular issued which has taken effect from April 1.
According to the circular, the directive took effect from April 1.
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 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.
CBN said, “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 percent of the value.”