CBN Directs Banks to Load ATMs, Threatens Sanctions Banks Giving Cash to Naira Hawkers

The Central Bank of Nigeria (CBN) has issued a directive to banks, emphasizing the need to prioritize cash disbursements through automated teller machines (ATMs).

This directive comes as part of a broader strategy to prevent the flow of mint banknotes to individuals hawking naira notes, a practice that undermines the integrity of Nigeria's currency system.

The CBN's circular, titled "Mystery Shopping & Spot Checks on Cash Disbursement Activities of Deposit Money Banks (DMBs)," outlines the measures the apex bank will take to enforce compliance.

Solaja Olayemi, acting director of the currency operations department at CBN, signed the circular, which was officially released on November 16th, 2024.

The document highlights the CBN's commitment to conducting spot checks and mystery shopping activities in collaboration with law enforcement agencies, particularly during the yuletide season when cash demand is expected to rise.

"For the avoidance of doubt," the CBN warns, "DMBs, to whom cash seized from 'hawkers' of cash is traced, will be penalized 10% of the total value of cash withdrawn on the day the seized cash was withdrawn from the Central Bank of Nigeria (CBN)."

The circular further states that "every subsequent offense will be charged an incremental penalty of 5%."

The CBN's initiative aims to ensure that banks support responsible cash disbursement to the public while discouraging practices that facilitate the misuse of mint banknotes.

Banks found engaging in cash hoarding, diversion, or any actions that hinder efficient cash distribution will face appropriate sanctions, including violations of the Clean Note Policy.

As the festive season approaches, the CBN urges banks to implement internal controls for responsible disbursement and accountability regarding mint banknote payouts at their outlets. By prioritizing ATM cash distribution, the CBN seeks to enhance public access to cash and maintain the integrity of Nigeria's currency distribution systems.