ADDIS ABABA – National Bank of Ethiopia has told persons who carry more than 100,000 Birr old notes that their cash will be confiscated.
The announcement came after the deadline for changing the old currencies with new ones for an amount of 100, 000 to 1,5 million birr expired on Friday.
The deadline has not been extended, Dr. Yinager Dessie, governor of the central bank, said while briefing reporters on Friday.
Citizens can change cash less than 100,000 Birr notes, Yinager said, for at least two months. But the deadline may be shortened based on the performance, he added.
The governor also stressed that the Bank will focus working to convert the money in the hands of farmers and pastoralists as the government continues its effort to stamp out counterfeiting by introducing new currency notes.
Many joining banking system
The overall effort is pulling people who’ve never had a bank account into the financial system, according to Bloomberg’s report.
Over the past four weeks, almost 1 million previously unbanked Ethiopians have handed in their two-decade-old banknotes, the central bank said, with the figure showing a dramatic increase from what it was a week ago.
In exchange, they were given a bank account from which they can draw the new notes. The regulator is trying to deter cash hoarding that enables corruption and illegal trading to thrive, and escapes the tax net.
The demonetization initiative has added 31 billion birr ($830 million) to the 990 billion birr of deposits that were in the country’s 19 banks at the end of March, according to Bloomberg. The central bank estimates there was 92 billion Birr of unbanked cash in Ethiopia in July 2019.
“We expect more people, in the rural and urban areas, to open bank accounts,” National Bank of Ethiopia Governor Dr Yinager told state television last week.