Home Finance CBN to introduce N1000 note in May 2005.

CBN to introduce N1000 note in May 2005.

by Business News Report

By Omoh Gabriel and Babajide Komolafe
The Central Bank of Nigeria will on May 29, 2005, introduce the N1000 denomination note into circulation in the Nigeria economy. CBN Governor Professor Charles Soludo made this disclosure in an interview in Lagos over the weekend. Professor Soludo who spoke to some journalist said that the design of the N1000 note was on would soon be sent for minting. He said that Nigeria needs on the average about 4billion worth of currency notes annually. This he said is currently being imported a situation he described as a shame that Nigeria which has a security printing and minting company is today importing its currency. He said that the situation is unacceptable that has prompted the CBN to ask for permission to take over the Nigeria security printing and Minting company.
Professor Soludo said that the CBN is currently working on a business plan that when implemented will make the Mint the most viable security company in the West Africa subregion. He said that the company will start on a fresh note and all previous dealings with foreign parners have been stopped. The CBN he said will run the place and in three years he hopes that all Nigeria currency needs will be met by NSPMC.
Professor Soludo further said that the CBN has not taken decision on the proposed introduction of polymer plastic money saying it is a new technology that is not being widely used at the moment. He said that those who are calling for the use of polymer notes instead of paper notes say that it is difficult to counterfeit, and that it has life span of 3-9 years while paper money has a much shorter life span especially in a country like Nigeria where the currency is subject to various abuse. The governor disclosed that the CBN will take presentation from the various interested parties and that if there is need for a change the cost will be weighed against the benefit before a decision is taken. According him the CBN is open on the matter and is examinig it . He said that the apex bank in arriving at any decision on the matter will be guided by what is best for the Nigeria people. He said that the CBN was determined to break the jinx of Nigeria not being able to mint its own currency internally.
On the current reform in the banking industry the governor said that the CBN had the option of liquidating about five banks at the time he assume office and quite a few others were in and out of sound condition. He said the system was at the verge of collapse and needed necessary measures to address the situation once and for all. He said that the decision on what figure to use was very well debated by the CBN. According to him there were several suggestions on what amount to use as benchmark. Some he said suggested N50 billion, others N32billion and some other presons N25 billion. Soludo said that the N34 billion was almost taken but for the fact that those who were for N25 billion were more. The Figure he said was not arbitrarily chosen as some may want to suggest but very well debated and arrived at given the fact that the BOFIA empowers the CBN to from time to time determine the minimum capital base of banks and other financial institutions.

According to CBN Governor while some banks were busy doing other things some banks made very useful suggestions and input to the final guideline on opertional modality of the reform. He disclosed that the forebearance aspect of the gudiline came from suggestions from the banks
Professor Solude also said that the CBN will be restructured for effectiveness. He disclosed that a policy department will be set up in the CBN with at least 20 doctorate decgree holders in Economics in the department. He said that the research unit will be strenthened.He said that the CBN will henceforth seek to strike appropriate balance between Economic management and banking supervision without any overriding the other.
Soludo said that there will be realignment of CBN resources from the mundane things like real estate to formulation and cordination of monetary poliy as well as banking supervision.
He said that the result so far have been phenominal and that he is very emboldened by the massive support Nigerians have given to the reform programme.

File: CBN governor 11/09/04

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