- The Central Bank of Nigeria has fined nine banks, including UBA, Zenith Bank, and FirstBank, for cash hoarding
- The CBN said the action is to maintain public trust and ensure economic stability
- The sanction followed several warnings by the CBN against cash hoarding
The Central Bank of Nigeria (CBN) has sanctioned nine Deposit Money Banks (DMBs) for failing to make cash available through their Automated Teller Machines (ATMs) during the yuletide season.
The CBN fined each bank N150 million, amounting to N1.35 billion, for non-compliance with the CBN’s cash distribution guidelines, following spot checks on their branches.
The affected banks include United Bank for Africa (UBA) Plc, Zenith Bank Plc, FirstBank Plc, Fidelity Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, and Sterling Bank Plc.
The CBN’s acting Director of Corporate Communications, Hakama Sidi Ali, confirmed the development, saying the action is to maintain public trust and economic stability.
Ali said, “Ensuring seamless cash flow is paramount to maintaining public trust and economic stability.
“The CBN will not hesitate to impose further sanctions on any institution found violating its cash circulation guidelines.”
There are indications that the fines would be debited directly from the banks’ accounts with the apex bank.
CBN had warned of penalties for cash hoarding
The CBN’s sanctions followed several warnings to financial institutions to guarantee seamless cash availability, especially during periods of high demand like the yuletide season, and stop cash sales to merchants.
The apex bank warned that penalties would be imposed on erring banks and other financial players involved in cash scarcity, particularly at ATMs.
To address reported cases of cash shortage, the CBN implemented measures to improve cash availability.
On December 17, the CBN introduced a new policy that limits daily transactions of N100,000 per customer for cash-out transactions conducted by Point of Sale (PoS) agents.
The apex bank also set each customer’s weekly cash withdrawal limit at N500,000 irrespective of channel, while each agent’s daily cumulative cash-out limit was pegged at N1.2 million
To halt the illicit flow of minted banknotes to currency hawkers and economic agents that commodify naira banknotes, the CBN announced a N150 million fine at first instance per branch of banks found guilty.
The apex bank, in a circular on November 13, 2024, 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, SEC sanction 10 banks for forex violations
Meanwhile, TheRadar earlier reported that regulatory agencies responsible for overseeing the activities of deposit money Banks in Nigeria sanctioned 10 banks for violations of foreign exchange guidelines and other regulatory offences.
These agencies, including the Central Bank of Nigeria and the Securities and Exchange Commission, imposed fines totalling N1.502 billion as penalties within the first six months of 2024.
