Bankers Committee Endorses Introduction of N5,000 Notes

The Bankers Committee yesterday endorsed the introduction of N5,000 note by the Central Bank of Nigeria (CBN), saying “it will reduce the cost of doing business’’.

Managing Director of the United Bank for Africa (UBA), Mr Philip Oduoza,  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”.

On the recent complaint by the EFCC that banks’ were not cooperating with it in accessing the accounts of those indicted in corruption cases, Oduoza 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, Managing Director, Standard Chartered Bank, Mrs Bola Adesola,  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.

Adesola also noted that the apex bank had tried to maintain a stable inflation rate in spite of all odds.

CBN Director, Cooperate Communications, Mr Ugochukwu Okoroafor,  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.

Meanwhile, the National Chairman, Progressives Action Congress (PAC), Chief Charles Nwodo, said that the proposed introduction of N5,000 note by the Central Bank of Nigeria (CBN) was counter productive and would “throw the nation into inflation”.

Nwodo, who made the remark in an interview with newsmen in Abuja, said the controversy surrounding the proposed introduction of the N5, 000 note had become an argument between the poor and the rich.

He regretted that the upper class saw no reason why people should complain about the idea but the masses who would feel the pinch more carried the public opinion against it.

The chairman said government should realise that panic could influence inflation even though they believed that it was only monetary factors and market forces that could determine inflation.

“A mere rumour that subsidy will be removed raised the cost of fuel, especially at the black market by 3,000 per cent, and based on this, there is every tendency that business people will raise the prices of their goods.”

The chairman said that the proponent of N5, 000 note had gone far to inform the public that it was designed for the rich who could afford to carry huge amount of money.

He regretted that the statement contradicted the new programme of cashless economy of the Central Bank of Nigeria (CBN).

According to him, it is not the quality of the denomination that matters but the value of that currency to the economy.

“ A person with N1,000 note and a person with two pieces of N500 note operate on the same level of currency.

He said N5,000 note could not reduce the amount of money in the market but could only reduce the denomination.

He urged the Federal Government to improve on the productive capacity of the economy, as it remained the major antidote toward building a robust economy.