11th September, 2012
Nigeria’s Bankers Committee on Tuesday endorsed the introduction of N5,000 note by the Central Bank of Nigeria (CBN), saying “it will reduce the cost of doing business’’.
Mr Phillip Oduoza, Managing Director of the United Bank for Africa (UBA) made this known while briefing newsmen on the outcome of the committee’s meeting in Abuja.
“Logically, the N5,000 notes will reduce cost of doing business and the total amount spent in printing the currency is going to reduce by 10 times. The cost of printing a currency still remain the same, whether you are printing N50 note or N5,000 note.
“So, if we print N5,000 note and print one million of it and do the same with N100, you find out that you have less physical currency as far as the N5,000 is concerned. Therefore, the cost will reduce when you are printing a bigger denomination,’’ he said.
According to him, it will encourage service efficiency, assuring that the introduction of the bill would not bring about inflation in the country.
He noted that the new note would facilitate reduction in the lending rate by commercial banks.
“So many things are involved in the lending rate. For instance, if the cost of production, management and transaction of currency is reduced, automatically many charges will drop including the lending rate.”
Oduoza also assured that it would be difficult to fake the new currency, “as higher denominations pass through a lot more scrutiny”.
He added that no contract had been awarded yet for the printing of the new currency and urged Nigerians to positively accept the N5,000 note.
He added that the committee had also discussed issues of funding agriculture, the cash less policy and how they would impact on the nation’s economy.
On the recent complaint by the EFCC that banks’ were not cooperating with it in accessing the accounts of those indicted in corruption cases, Odnozo pledged that the banks would continue to work with the commission to ensure service delivery.
According to him, a committee on financial literacy has been established to look at the issues and engage the EFCC to facilitate improvement in relations to enhance the commission’s work.
Also, Mrs Bola Adesola, Managing Director, Standard Chartered Bank said that the new notes would only be issued to customers on request.
“Those who want the N5,000 note will get it, customers will still have the right to choose the denomination they want to use,’’ she said.
She added that inflation and other challenges being feared by many Nigerians had been properly considered by the committee.
Adesola also noted that the apex bank had tried to maintain a stable inflation rate in spite of all odds.
Mr Ugochukwu Okoroafor, CBN Director, Cooperate Communications said that the coins and notes would run side-by-side.
This, he said, would dispel the fears that the cost of commodities sold for N50 would automatically rise because N50 was converted to coins.
“Restructuring of the Naira will continue to be done in the best interest of the country and not to raise inflation and other issues as people are speculating,’’ he added.