- The Central Bank of Nigeria CBN says it will fine banks N150 million for sale of minted naira notes to hawkers
- CBN said illicit naira trade undermines its efforts to ensure efficient and effective cash distribution
- It urged banks to ensure stricter control of its internal operations
The Central Bank of Nigeria (CBN) says it will impose a N150 million fine on the first instance per branch on deposit money banks (DMBs) involved in the illicit flow of mint banknotes to currency hawkers and economic agents that commodify naira banknotes.
The CBN noted that the selling of naira banknotes to currency hawkers by banks undermines efficient and effective cash distribution to banks’ customers.
The apex bank stated this in a circular issued on December 13, 2024, and signed by the acting Director of the Currency Operations Department, Mohammed J. Olayemi.
The circular, which referred to an earlier directive dated November 13, 2024, stated that any bank branch found culpable of facilitating, aiding, or abetting the flow of mint notes to hawkers would be fined N150 million.
It added that subsequent violations will attract stricter penalties as provided in the Banks and Other Financial Institutions Act (BOFIA) 2020.
The circular read, “The CBN has noted with dismay the prevalence of illicit flow of mint banknotes to currency hawkers and other unscrupulous economic agents that commodify Naira banknotes, thus impeding efficient and effective cash distribution to banks’ customers and the general public.
“CBN will continue to intensify the periodic spot checks to the banking halls/ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots across the country.
“In this regard, any erring deposit money banks or financial institutions that are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes shall be penalised at first instance N150 million only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”
CBN urges banks to tighten internal controls
The apex bank further stated that it will intensify its periodic spot checks in banking halls and ATMs, aimed at reviewing cash disbursement practices.
It said it would conduct mystery shopping exercises to identify cash-hawking hotspots to apprehend banks involved in the illicit act.
The CBN further urged deposit money banks to strengthen controls, processes, and procedures around their Cash Management Centres, branches, and teller operations to avoid exploiting their systems for illegal transactions.
CBN had warned of penalties for illicit naira flow
In a circular on November 13, 2024, the apex bank announced stringent penalties for banks found culpable of hoarding or diverting cash to hawkers.
The CBN said any bank linked to cash seized from hawkers would face a fine of 10 per cent on the total value of the withdrawn funds, and subsequent violations would attract an incremental penalty of five per cent.
It also warned banks against cash hoarding and diversion, as such practices limit access to cash and undermine its efforts to ensure an efficient and effective cash flow.
CBN to start fining banks over cash scarcity at ATMs
Meanwhile, TheRadar reported that the Central Bank of Nigeria (CBN) issued a stern warning to financial institutions over the ongoing cash scarcity at Automated Teller Machines (ATMs) across the country.
CBN governor, Olayemi Cardoso, announced that penalties would be imposed on erring banks and other financial players during his address at the annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria on Friday, November 29.
