April 26, 2019/.CBN
Section 2 of the CBN Act, 2007 vests the issuance of legal tender currency on the Central Bank of Nigeria (CBN). The task entails design (including security features), production, and distribution of newly printed notes and fit notes as well as replacement of unfit banknotes which are destroyed or older series withdrawn from circulation. The Bank also has responsibility to preserve the integrity of the Naira and thereby sustain public confidence in the legal tender currency. To attain these objectives, the quality of the Naira banknotes in circulation must be maintained in good condition to ensure that they could be processed by approved processing systems and freely accepted by the general public for payment and settlement of transactions.
As part of its statutory task for the issuance and management of legal tender currency in Nigeria, the CBN formulates and issues the Clean Note Policy. It ensures that Nigerian banknotes are of high quality, clean and are used with the highest confidence by the general public, retailers and other cash handlers. The Clean Note Policy requires that the production, issuance of new banknotes and recirculation by the DMBs as well as processing companies conform to the predetermined standards. Section 18 of the CBN Act 2007 imposes an obligation on the Bank to maintain the quality of banknotes issued.
The Clean Note Policy enunciated therefore, by the Bank, entails a spectrum of diverse currency management activities geared towards the efficient circulation of premium quality banknotes and withdrawal of unfit/soiled banknotes to guarantee public confidence and usage of the Naira banknotes as a medium of exchange.
In addition, in recent times, efforts are being made to devolve the retail currency management function of the CBN to the private sector while the Bank concentrates on the wholesale function. To achieve the Clean Note Policy in the context that the private sector plays a key role in sorting banknotes and adhere to all the guidelines and use of approved processing infrastructure, the Bank realizes the need to issue the Clean Note Policy encapsulated in a document.
The objective for the issuance of this handbook is therefore, to ensure compliance with cash management standards and practices.