NEWS FLASH

CBL Or Commercial Banks -Who Is Withholding New Banknotes?

CBL Or Commercial Banks -Who Is Withholding New Banknotes? Featured

MONROVIA, LIBERIA - A meticulous investigation conducted by the Heritage has found out that most, if not all of the commercial banks in the country, are still paying out mutilated and old banknotes to depositors, despite the fact the Central Bank of Liberia (CBL) is infusing the recently printed four billion Liberian dollar banknotes into the economy. In other instances, commercial banks are paying out the new Liberian banknotes to depositors in “peace meal”, making it difficult for them to meet their demand for cash.

The Mission and Objectives of the CBL is to maintain price stability and to ensure a sound banking and financial system, thereby contributing to sustainable economic development of the nation. Multiple independent financial sources have corroborated accounts that authorities of the CBL have asked the banks to address the situation urgently to ease the liquidity pressures. Central Bank sources have said the bank is keen not to cause inflation by infusing a huge amount of money on the market in addition to what is already in circulation, but that commercial banks were reserving the new banknotes and large sums of money for large customers.

Central Bank officials are making efforts to address the liquidity problem, but that commercial banks need to cooperate with the mandate of the CBL. It is not clear why the commercial banks are reportedly giving the new Liberian dollar banknotes to depositors in “peace meal” when the CBL had given them the new money to bring relief to the ordinary people. The decision to print Liberian dollar banknotes is in accordance with Parts II & V of the CBL Act of 1999. Under these provisions, the CBL, upon the approval by the National Legislature, has the responsibility to print and issue Liberian dollar banknotes in the economy.

Kroll Associates, Inc. (Kroll), a global provider of risk solutions and principally a global investigative firm, was engaged as part of a United States Agency for International Development’s (USAID) technical assistance program to the CBL, to ensure that the procurement process surrounding the printing of the additional Liberian dollar banknotes was open and transparent, and that the shipment of the new banknotes from the printer to the CBL’s vaults was secure. The International Monetary Fund (IMF) was also consulted prior to printing the banknotes, to ensure compliance with its Liberia program.

Kroll uncovered systemic inadequacies in procurement processes and record keeping at the CBL when investigating concerns surrounding the alleged printing of LD16 billion new banknotes in September 2018. Accordingly, when the new Liberian banknotes arrived in the country, the Executive Governor of the CBL, Mr. J. Aloysius Tarlue, Jr., quoted by a press release issued by the CBL, said: “The arrival of the additional Liberian dollar banknotes is good news indeed. It will help ordinary Liberians to pay for school fees, hospital bills and other important bills.”

Financial analysts believe that authorities of the CBL have to ensure the commercial banks live up to the mandate of the Central Bank to bring relief to many of the depositors. Our reporter said many of the depositors, who troop to commercial banks as early as 8:00 am on daily basis to withdraw their money, leave these banks with total disappointment, as they do not receive all of the cash they want and to make matter worst, the mutilated banknotes are usually many among the insufficient banknotes they receive.

Still, our reporter said during a tour at several banks in Monrovia and its environs, it was openly announced that there was insufficiency of money, most especially the local currency, thus leaving several customers, who had gone to withdraw from their respective accounts, in a state of total frustration. “We don’t have sufficient money. If you came to withdraw or receive money, we will not give out more than US$100. Even the Liberian dollars we have here is low. We are saying this just for your information. If you came to receive or withdraw more money, then you have to try at another bank, but there is no sufficient money,” announced an official of the International Bank (IB) on Camp Johnson Road in Monrovia. This is not unique at the International Bank Liberia Limited Camp Johnson Road branch, but several other banks and financial institutions.

 

Login to post comments