The Central Bank of Nigeria (CBN) has declared stringent penalties for Deposit Money Banks (DMBs) and financial institutions engaged in the inappropriate disbursement of mint banknotes to currency hawkers and economic agents who profit from the illicit trade.
Penpushing reports that the declaration was contained in a circular by the Acting Director, Currency Operations Department, Solaja Olayemi, dated December 13, 2024, citing incidents of banks facilitating the illicit flow of mint Naira notes through direct actions or inactions.
The circular emphasized that erring banks will now face an initial fine of N150 million, with more severe penalties for repeated violations under the Bank and Other Financial Institutions Act (BOFIA) 2020, expressing dismay at the increasing prevalence of Naira hawking.
Penpushing further reports that Olayemi in the circular pointed out that this undermines efficient cash distribution and poses risks to public confidence in the financial system, adding that the authorities will intensify periodic spot checks at banking halls and Automated Teller Machines (ATMs) nationwide.
The Acting Director, Currency Operations Department, added that the Central Bank of Nigeria (CBN) officials will equally conduct mystery shopping exercises to identify locations where cash hawking activities occur.
Penpushing also reports that the circular stated that the apex bank emphasised that, in addition to monetary penalties, repeat offenders would face the full weight of the relevant provisions under Bank and Other Financial Institutions Act (BOFIA) 2020.
The Acting Director, Currency Operations Department called on all banks to tighten internal controls, particularly in their cash management centres, branches, and teller operations, stressing that the move comes as part of broader efforts to curb illicit cash activities and ensure a transparent and effective currency distribution framework.
Penpushing reports that it is on record that Nigerians have recently faced growing frustration over their inability to access sufficient cash from banks, as a cash-dependent economy, many livelihoods and economic activities rely solely on cash transactions, which have now been severely disrupted.
Meanwhile, the Central Bank of Nigeria (CBN) on December 4, 2024 directed banks to improve cash availability across branches and Automated Teller Machines (ATMs), and also published dedicated hotlines and email addresses for the public to report challenges in accessing cash through banks and Automated Teller Machines (ATMs).
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