In a decisive effort to curb the unauthorized distribution of freshly minted naira notes, the Central Bank of Nigeria (CBN) has announced a penalty of N150 million per branch for any Deposit Money Bank (DMB) found complicit in such activities.
The move, aimed at halting the illegal flow of mint naira notes to currency hawkers and other unethical agents, seeks to address what the CBN describes as a growing problem undermining equitable cash distribution in the country.
A circular issued on December 13, 2024, signed by Mohammed J. Olayemi, Acting Director of the Currency Operations Department, expressed the apex bank’s concerns.
It emphasized the increasing prevalence of new naira notes being sold at cash hawking locations, a practice that has drawn sharp criticism from stakeholders.
Referencing an earlier directive from November 13, 2024, the CBN reaffirmed its commitment to tackling these illicit activities. The initial violation by any bank branch will attract the N150 million fine, while subsequent breaches will trigger stricter sanctions in line with the Banks and Other Financial Institutions Act (BOFIA) 2020.
The apex bank also outlined plans for intensified inspections, including surprise audits of banking halls and ATMs, to monitor cash handling practices. Furthermore, mystery shopping operations will be conducted to uncover hotspots for cash hawking and identify the banks enabling such practices.
The circular stated: “The CBN has noted with dismay the prevalence of illicit flow of mint banknotes to currency hawkers and other unscrupulous economic agents that commodify Naira banknotes, thus impeding efficient and effective cash distribution to banks’ customers and the general public.
“CBN will continue to intensify the periodic spot checks to the banking halls/ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots across the country.
“In this regard, any erring deposit money banks or financial institutions that are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes shall be penalised at first instance N150,000,000.00 (One hundred and fifty million Naira) only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”
The CBN called on financial institutions to bolster internal controls and cash management protocols across Cash Management Centres, branches, and teller operations to prevent exploitation of their cash distribution systems.