The Central Bank of Nigeria (CBN) has issued a warning to financial institutions involved in the unlawful distribution of newly minted naira notes.
The apex bank has stated that any bank found to be facilitating the illicit flow of these new banknotes will incur a substantial penalty of N150 million naira per branch.
In a circular signed by Solaja Olayemi, the acting director of the CBN’s Currency Operations Department, the regulatory body expressed serious concern regarding the diversion of newly minted banknotes to currency hawkers and other unscrupulous economic agents. This unlawful activity interrupts the effective distribution of cash to both bank customers and the general public.
The CBN has outlined several measures to address this issue, which include intensifying spot checks within banking halls, at automated teller machines (ATMs), and engaging in mystery shopping across identified locations associated with currency hawking. These initiatives are intended to ensure that financial institutions are not distributing new naira notes to unauthorized individuals.
The circular explicitly states that any deposit money bank or financial institution implicated in enabling the illicit flow of newly minted naira notes will be subject to a fine of N150 million naira for each offending branch. In cases of repeated violations, the CBN will enforce the full extent of the relevant provisions under the Banking and Other Financial Institutions Act (BOFIA) of 2020.
The circular further asserts, “In this regard, any deposit money bank or financial institution found culpable of facilitating, assisting, or enabling the illicit flow of mint banknotes to currency hawkers and other unscrupulous economic agents shall be penalized in the first instance with a fine of N150,000,000.00 (One hundred and fifty million naira) per offending branch, with subsequent instances resulting in the application of the full weight of relevant provisions of BOFIA 2020.”
Moreover, the CBN has urged banks to enhance their internal controls, with particular emphasis on cash management systems at branches and during teller operations. The bank also reiterated its appeal for improved efficiency in cash disbursement and reminded financial institutions of its earlier directive issued on November 15, which prioritized ATM cash withdrawals.
Furthermore, the CBN has cautioned that banks engaged in cash hoarding, diversion, or any actions that obstruct the proper distribution of currency, including violations of the Clean Note Policy, will face severe penalties.