CBN Releases Banknote Fitness Guidelines

Friday, April 26, 2019 02:40PM / CBN

1.0 Introduction

1.1 CBN Mandate

One ofthe core mandates of the Central Bank of Nigeria (CBN) as enunciated in section2 of the CBN Act, 2007, is the issuance and management of the legal tendercurrency in Nigeria. The Currency Operations Department (COD) of the CBN isresponsible for the discharge of this mandate by ensuring that the volume ofbanknotes and coins in circulation is sufficient, of good quality and generallyacceptable by the public. To achieve this, the Bank manages the currency notesthroughout their life cycle. The notes can easily be checked for theirgenuineness during the period of circulation. The banknotes are also sortedinto fit and unfit notes. The fit notes are recirculated while the unfitbanknotes are withdrawn, disposed and replaced by new banknotes.

1.2 Definitions

Note Quality Standard

The objective of a banknote fitness standard is toaddress the following:

Ensuring that banknotes meet the expectation of the public in terms of cleanliness and appearance;
Ensuring that basic security features on the banknote remain visible and are easily recognized by the public to deter counterfeiting; and
Facilitating automated dispensing, counting and sorting of banknotes.

Fit Banknote

Abanknote that is suitable for continued circulation and is sufficiently cleanto allow its authenticity and value to be readily ascertained.

Unfit Banknote

Abanknote that is unsuitable for further circulation because of its physicalcondition, which may be soiled, dirty, limp, worn out, defaced or has a holethat is larger than 10 mm. Unfit notes should be returned to DMBs or a branchof the CBN anywhere in Nigeria for exchange.

1.3 Guidelines on QualityStandard for the Nigerian Banknotes

Theseguidelines provide the general public with clear, acceptable criteria andstandards for determining the quality of banknotes in circulation. Fitnessstandards are developed for all denominations of the banknote. These standardsestablish the desired fitness criteria and parameters for the banknotes whichprovide a benchmark and reference for evaluating banknotes in circulation. Thefitness criteria include:

* Thedurability and functionality of security features on the notes;

*Banknotes structure and durability; and

*Banknote quality i.e. printing and appearance of the banknotes (soiling/inkwear) etc.