The Central Bank of Nigeria has expressed concern over the increasing amount of mutilated banknotes deposited with the apex bank by Deposit Money Banks.
To this end, the CBN has warned banks to stop including composed currency notes in their deposits or risk paying a penalty of 400 per cent of the value of the banknote.
Composed banknotes are mutilated currency notes that comprise 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.
The CBN gave the warning in a circular titled, ‘Treatment of Composed Banknotes’, issued to all deposit money banks on March 31, and signed by its Director, Currency Operations Department, Ahmed Umar.
Umar said that the existence of such banknotes in the economy falsifies the true value of the currency in circulation and could also be an avenue for fraudulent activities.
He added that the directive took effect from April 1.