The Central Bank of Nigeria (CBN) has issued a robust warning to Deposit Money Banks (DMBs) against hoarding and diverting cash, announcing new penalties for banks that restrict public access to cash. In a circular dated November 13, 2024, signed by Acting Director of Currency Operations, Muhammad Olayemi, and released on Friday, the CBN detailed heightened measures to enforce transparent cash distribution, particularly as Nigeria enters the festive season, when cash demand traditionally peaks.
To ensure fair access to currency, the CBN reminded banks of its ongoing “mystery shopping” exercises and spot checks designed to curb cash abuse, especially the illicit flow of fresh banknotes to unauthorised hawkers. According to the CBN’s circular, any bank traced to seized cash from hawkers will face a 10% fine on the total value of cash withdrawn from the CBN that day, with repeat offenses incurring an additional 5% penalty.
“These penalties reflect our zero-tolerance approach towards hoarding, diversion, and other practices obstructing cash flow,” the CBN stated. “Such actions violate the Clean Note Policy, and offenders will face severe sanctions.”
The directive arrives as Nigerians grow increasingly frustrated with empty ATMs, raising concerns over banks’ cash-handling practices. Amid mounting complaints of limited ATM access, the CBN directed banks to prioritise cash dispensing through ATMs rather than over-the-counter sales, where access has been less restricted. To enforce compliance, the CBN will work with law enforcement to intensify spot checks and undercover inspections, holding banks accountable for cash misuse.
This crackdown comes at a critical time for Nigeria’s banking system. While formal banks report cash shortages, Point-of-Sales operators are meeting customer needs, prompting speculation that cash flow issues stem less from supply and more from questionable distribution practices within certain banks.
In these measures, the CBN has sent a clear message: violations will not be tolerated, and banks must uphold their responsibility to the public or face significant financial and regulatory consequences.
