According to local reports, Nigerian financial institutions have begun abiding by a Supreme Court ruling that invalidated the Central Bank of Nigeria (CBN)’s demonetization of the 1,000, 500 and 100-naira banknotes. According to the court, Nigerian residents will continue to use the demonetized banknotes until the end of the year.
Court Criticizes Outgoing Nigerian President
Nigerian financial institutions have reportedly started dispensing the recently demonetized 1,000, 500 and 100-naira banknotes just days after the nation’s highest court ruled against the CBN’s so-called naira redesign policy. According to a Bloomberg report, some of the country’s leading financial institutions such as Guaranty Trust Holding Co. Plc and Sterling Bank Plc were already dispensing the old notes on March 6.
In its ruling delivered on March 3, 2023, the Nigerian Supreme Court slated the central bank’s hasty demonetization process. The court also accused the outgoing president Muhammadu Buhari of undermining the country’s democratic credentials after his government failed to abide by a provisional order that barred it from proceeding with the demonetization process.
While the CBN has not issued a formal statement following the Supreme Court’s ruling, the CEO of Sterling Bank, Abubakar Suleiman, is quoted in the Bloomberg report explaining why banks have chosen to comply with the ruling.
“The central bank is abiding by the supreme court’s ruling, as are the banks. I don’t think we need a directive to obey the court,” the executive reportedly said.
Demonetized Banknotes to Remain Legal Tender Until End of Year
By redistributing the old banknotes, Nigerian banks not only comply with the court ruling but will also placate dissatisfied bank customers that failed to withdraw cash in the days leading to the Feb. 10 demonetization deadline. As previously reported by Bitcoin.com News, the CBN’s refusal to extend the deadline, as well as banks’ inability to dispense the newly designed banknotes, helped to spark violent street protests.
Despite the pleas by members of his own political party, All Progressives Congress (APC) president Buhari insisted in a televised address that his government still supported CBN’s naira redesign policy and that the demonetization deadline would not be extended. However, in its ruling, the Nigerian supreme court declared that all the old naira banknotes would remain legal tender until the end of the year.
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Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
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