If You Have MONEY In Zenith, GTB, Other Popular Banks, Read This Immediately As CBN Drops Urgent Announcement
The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) regarding the issues of cash hoarding and diversion, stressing that such practices will attract severe penalties. The warning was delivered in a circular dated November 13, 2024, which was signed by Muhammad J. Olayemi, the Acting Director of Currency Operations. Released by the CBN on Friday, the circular outlined a series of measures aimed at ensuring more effective and transparent cash distribution processes.
The CBN reminded banks about its ongoing mystery shopping exercises and spot checks, which are intended to discourage any improper handling of naira notes and to promote responsible cash distribution, especially with the holiday season fast approaching. The central bank’ s objective is to prevent newly minted banknotes from being diverted to unauthorized vendors or hawkers, ensuring that the public has access to cash in an orderly manner.
As part of the directive, the CBN warned that any bank found to be linked to the seizure of cash from unauthorized cash hawkers would face significant financial penalties. Specifically, these banks would be fined 10 percent of the total value of cash withdrawn from the CBN on the day the infraction took place. Furthermore, repeat offenders will be subject to an additional 5 percent penalty for every subsequent violation. This move highlights the CBN’ s commitment to curbing illegal activities related to cash handling and enforcing accountability.
The circular also specifically addresses the issue of cash hoarding and diversion, which are considered violations of the CBN’ s Clean Note Policy. The Clean Note Policy is designed to ensure the proper circulation of currency, and any actions that impede the efficient flow of cash will result in sanctions. The CBN made it clear that institutions found guilty of such practices would face appropriate sanctions, including potential fines or other regulatory actions that could affect their operations.
To emphasize the seriousness of the matter, the CBN outlined the penalties more explicitly, stating that DMBs found to be connected to seized cash from hawkers would incur a 10 percent penalty based on the total value of cash withdrawn from the central bank on the date of the incident. For each subsequent violation, an additional penalty of 5 percent would be levied. The circular also warned DMBs that engaging in cash hoarding, diversion, or any action that obstructs the smooth distribution of cash would attract serious consequences.
In light of the increased demand for cash during the upcoming festive season, the CBN has instructed banks to implement stronger internal controls to ensure the transparency and accountability of cash disbursements. It has specifically encouraged DMBs to prioritize cash distribution through Automated Teller Machines (ATMs) to enhance public access, in response to growing complaints about limited cash availability, particularly in ATMs.
The situation has been compounded by reports of recurring shortages in ATMs, with many bank machines remaining empty for extended periods. Some banks, especially in the Federal Capital Territory, have even begun rationing cash, limiting over- the- counter withdrawals to between N5, 000 and N20, 000 per day. This has created additional challenges for customers seeking to access cash, with Point- of- Sales (POS) operators stepping in to meet customer needs, albeit at a premium.
To ensure that these directives are adhered to, the CBN has pledged to collaborate with law enforcement agencies to increase monitoring efforts. This will include more frequent spot checks and mystery shopping activities designed to detect any irregularities in how cash is being handled by the banks. Through these measures, the CBN aims to hold erring banks accountable and reduce instances of cash abuse that undermine the efficiency of Nigeria’ s financial system.
Overall, the CBN’ s circular seeks to address the ongoing issues of cash distribution inefficiency and abuse, with the aim of restoring public trust and ensuring that cash is made available in a fair and transparent manner, especially during high- demand periods such as the festive season.
