The Central Bank of Nigeria (CBN) has announced severe penalties for any bank involved in currency hoarding or diversion as part of its commitment to ensuring proper distribution of the nation’s currency.
In a circular issued on November 13, 2024, the CBN outlined stringent measures for Deposit Money Banks (DMBs) found to be diverting cash to unauthorised hawkers.
Under the new directive, any bank found linked to cash seized from hawkers will face an initial 10 percent fine on the total value of the withdrawn funds. Furthermore, subsequent violations will result in an additional 5 percent penalty for each infraction. This action is aimed at curbing abuses, particularly as the festive season approaches, when demand for cash typically surges.
The CBN’s warning follows public concerns over limited access to cash, especially at Automated Teller Machines (ATMs), and is part of an ongoing effort to ensure a responsible and equitable distribution of currency. The apex bank also reiterated its commitment to preventing newly minted banknotes from flowing into the hands of hawkers and emphasized its determination to uphold the Clean Note Policy.
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As part of its surveillance efforts, the CBN has been conducting mystery shopping exercises and spot checks across the country to detect any irregularities in currency handling. Banks found violating the policy will face fines, and the central bank is prepared to take further regulatory actions if necessary.
In addition, the CBN has instructed banks to prioritize cash disbursement through ATMs, ensuring that legitimate customers have timely access to cash.
In a final warning, the CBN emphasised that banks engaged in such practices could face additional punitive measures, including further financial sanctions and stricter regulatory scrutiny, to safeguard the integrity of the nation’s currency system.
