The Central Bank of Nigeria (CBN) has imposed a N150 million fine on Deposit Money Banks (DMBs) that were found to be complicit in the illegal flow of mint Naira banknotes to currency hawkers and unethical economic agents.
Solaja Mohammed J. Olayemi, acting director of currency operations, disclosed this in a circular dated December 13, 2024, with reference number COD/DIR/INT/CIR/001/025.
The CBN voiced its displeasure at the ongoing commercialization of Naira banknotes, which the apex bank claimed jeopardizes the effective distribution of currency to bank customers and the general public, in the circular, which cited an earlier notice published on November 13, 2024.
The CBN claims that the practice jeopardizes the integrity of Nigeria’s currency management system and is harmful to the economy.
According to the circular, “CBN will continue to intensify the periodic spot checks to the banking halls and ATMs to review cash payouts to banks’ customers, as well as mystery shopping at all identified cash hawking spots across the country.”
Any negligent financial institution found to be at fault would be subject to severe sanctions, the statement added, including a fine of N150 million per branch for the initial violation. The CBN issued a warning that the full force of the pertinent provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 will be applied to any further infractions.
An anonymous CBN official stated, “This step is not just punitive but also serves as a deterrence to the unwholesome behaviors that have continued to plague our currency management system. We are committed to ensuring that the Naira is treated with the dignity it deserves.”
The CBN has instructed all DMBs and financial institutions to improve controls, protocols, and procedures in their cash management centers, branches, and teller operations in order to stop these activities. According to the apex bank, these steps are essential to guaranteeing the smooth and efficient movement of money throughout the Nigerian economy.
While acknowledging the direction, a banker who spoke on condition of anonymity noted certain difficulties. “The CBN’s action is praiseworthy, but banks also require improved systems to efficiently track and monitor cash movements. The banker pointed out that it’s a shared obligation.
This move is a part of the CBN’s continuous efforts to clean up the financial system and reaffirm its zero-tolerance policy against actions that weaken the Naira and prevent citizens from having fair access to cash.