CBN
CBN warns banks against cash diversion, hoarding, imposes sanctions
The Central Bank of Nigeria (CBN) has warned Deposit Money Banks (DMBs) against hoarding and divertiing cash to hawkers, especially as Nigeria approaches the Yuletide season.
The CBN said banks found culpable face 10 percent penalties of the cash withdrawn and traceable to such banks, with subsequent violations attracting an incremental penalty of five percent..
A circular signed by Muhammad J. Olayemi, Acting Director, Currency Operations Department, dated November 13, 2024, explained that these measures are aimed at curbing the abuse of naira notes and promote an efficient cash distribution system, especially during the forthcoming Yuletide season.
The circular emphasized CBN’s commitment to enforcing its Clean Note Policy, which seeks to maintain the integrity of the naira by ensuring proper handling and circulation of banknotes.
The CBN said cash hoarding and diversion undermine access to cash, particularly during high-demand periods like the yuletide season.
It insisted that banks engaged in these activities will face penalties, especially at the apex bank will work closely with law enforcement agencies to intensify spot checks and mystery shopping activities.
According to the circular, “For the avoidance of doubt, it should be noted that:
“a) DMBs, to whom cash seized from “hawkers” of cash is traced, will be penalized 10 per cent of the total value of cash withdrawn on the day the seized cash was withdrawn from the Central Bank of Nigeria. Every subsequent offense will incur an incremental penalty of 5 per cent.
“b) DMBs found engaging in cash hoarding, diversion, or any actions that hinder efficient cash distribution, including violations of the Clean Note Policy, will incur appropriate sanctions.”
The circular highlighted the need for banks to prioritise the disbursement of cash through Automated Teller Machines (ATMs) to enhance public access and minimize reliance on unauthorised channels.
“As we approach the yuletide season, with an anticipated increase in cash demand, DMBs are advised to implement internal controls for responsible disbursement and accountability in respect of mint banknotes payouts at their outlets. To enhance public access to cash, we encourage banks to prioritize cash distribution through ATMs.
“During this season, the Bank, in collaboration with relevant law enforcement agencies, will intensify spot checks and mystery shopping activities to monitor and enforce responsible cash distribution and prevent Naira abuse,” the CBN stressed.