BANKS IN TROUBLE As CBN Moves To Fine Them N150m For Doing This With Naira Notes; SEE What
The Central Bank of Nigeria, CBN, has announced the imposition of a whooping N150million on Deposit Money Banks, DMBs, and financial institutions involved in the inappropriate disbursement of mint banknotes to currency hawkers and economic agents who profit from the illicit trade.
The apex bank added that erring banks will in addition to facing an initial fine of N150million also face more severe penalties for repeated violations under the Bank and Other Financial Institutions Act (BOFIA) 2020.
In a circular dated 13 December by the Acting Director, Currency Operations Department, Solaja Olayemi, the CBN expressed dismay at the increasing prevalence of Naira hawking, which undermines efficient cash distribution and poses risks to public confidence in the financial system.
The bank cited incidents of banks facilitating the illicit flow of mint Naira notes through direct actions or inactions.
The bank said it will intensify periodic spot checks at banking halls and ATMs nationwide. CBN officials will also conduct mystery shopping exercises to identify locations where cash hawking activities occur.
The CBN emphasised that, in addition to monetary penalties, repeat offenders would face the full weight of the relevant provisions under BOFIA 2020.
It called on all banks to tighten internal controls, particularly in their cash management centres, branches, and teller operations.
The move comes as part of broader efforts to curb illicit cash activities and ensure a transparent and effective currency distribution framework.
Nigerians have recently faced growing frustration over their inability to access sufficient cash from banks. As a cash-dependent economy, many livelihoods and economic activities rely solely on cash transactions, which have now been severely disrupted.
The CBN on 4 December directed banks to improve cash availability across branches and Automated Teller Machines (ATMs).
It also published dedicated hotlines and email addresses for the public to report challenges in accessing cash through banks and ATMs.
This problem the CBN is fighting tooth and nail to combat but hasn’t recorded much success is threatening the joyous celebration of the Yuletide season shortage of cash being experienced in most parts of the country is worsening.
Investigations has revealed that the issue, which has persisted for several months and shows no signs of abating, may further compound the woes individuals and businesses have been grappling with since the beginning of the year, especially during the festive period.
For instance, some who spoke with the media complained that the charges on their withdrawals at Point of Sales (PoS) centres have increased astronomically, by between 100 and 200 percent.
Adams Makinde, who lives around Agbado Area in Alimosho Local Government Area of Lagos state, said he was made to pay N200 on a N5,000 withdrawal at the PoS almost directly opposite the Police Station at Alagbado.
“I was surprised because the charges used to be N100 on a N5,000 withdrawal,” he stated.
He expressed fears that if the situation is not addressed before the Christmas and New Year festivals, it might further strain the finances of many Nigerians.
John Oladeinde, a Lagos resident who just returned from Ondo State, said he was made to pay N1,000 as charges for a N20,000 withdrawal while there for a function.
“The fact remains that none of the PoS operators I saw was even ready to part with that sum of money at once. They were all complaining of cash shortages until I found one that eventually charged that amount.
“I had to do it because I needed the money badly. Interestingly, there are indications that things may get worse during the Yuletide,” he added.
A PoS operator, Yetunde Momoh, attributed the development to inadequate cash at the banking halls and ATMs.
According to her, PoS operators, most of the time, can only manage to get N20,000 from the banks in a day. Others, she confessed, are usually sourced from market traders and petrol stations.
“These are unconventional means of sourcing these funds, hence the astronomical increase in the charges attached to the withdrawals. We are always told by our banks that there is no cash, and the little they have must be shared,” she added.
Further investigations also revealed that most banks have reconfigured their Automated Teller Machines (ATMs) to dispense between N5,000 and as low as N1,000 for customers using cards from other banks.
For instance, at the Adeola Hopewell branch of Access Bank in Lagos, customers holding other bank’s cards can only withdraw N5,000 at once, while subsequent withdrawals attract charges.
“I think it’s even better here. At the First Bank branch, very close to this place, that I visited before coming here, it’s N1,000 for customers holding another bank’s card,” stated a customer, who was holding a Zenith Bank debit card and had come to use the Access Bank ATM at Adeola Hopewell.
Despite the effort of the CBN to combat the menacing trend, Olamide Ayedun, a finance expert, believes the apex bank has not been walking its talk.
“It’s easy to put the blame on banks and PoS operators, but the fact remains that it is impossible to be facing this type of challenge without the apex bank knowing,” he stated.
Mr. Ayedun is, however, of the opinion that the development may set the cashless policy of the apex bank back, as many Nigerians may resort to putting their funds “under their pillows” for fear of being denied access to their money whenever it is needed.
In other news, the Socio-Economic Rights and Accountability Project, SERAP, has filed a lawsuit against President Bola Ahmed Tinubu over “the failure to direct the Attorney General of the Federation and Minister of Justice Mr. Lateef Fagbemi, SAN, to work with appropriate anti-corruption agencies to probe allegations that over N57billion of public funds are missing, diverted or stolen from the Federal Ministry of Humanitarian Affairs and Poverty Alleviation in 2021 alone.”
The damning allegations are documented in the 2021 audited report released last month by the Office of the Auditor-General of the Federation.
In the suit number FHC/L/MISC/876/2024 filed last Friday at the Federal High Court, Lagos, SERAP is asking the court “to compel President Tinubu to direct Mr Fagbemi to work with appropriate anti-corruption agencies to promptly probe allegations that over N57 billion of public funds are missing, diverted or stolen from the Federal Ministry of Humanitarian Affairs and Poverty Alleviation in 2021.”
SERAP is also asking the court “to compel President Tinubu to direct Mr. Fagbemi to work with appropriate anticorruption agencies to prosecute anyone suspected to be responsible for the missing N57 billion, if there is sufficient admissible evidence, and to recover any missing public funds.”
In the suit, SERAP is arguing that: “Investigating the allegations and prosecuting those suspected to be responsible for the missing N57 billion and recovering the missing funds would end the impunity of perpetrators.”
SERAP is also arguing that, “The allegations amount to stealing from the poor. There is a legitimate public interest in ensuring justice and accountability for these grave allegations.”
According to SERAP, “Poor Nigerians have continued to pay the price for the widespread and grand corruption in the Federal Ministry of Humanitarian Affairs and Poverty Alleviations and other ministries, departments and agencies [MDAs].”
SERAP is also arguing that, “The consequences of corruption are felt by citizens on a daily basis. Corruption exposes them to additional costs to pay for health, education and administrative services.”
The group added that, “The allegations also suggest a grave violation of the public trust, the Nigerian Constitution 1999 (as amended), the country’s anticorruption legislation and international anticorruption obligations.”
The suit filed on behalf of SERAP by its lawyers, Kolawole Oluwadare and Oluwakemi Agunbiade, read in part: “Granting the reliefs sought would go a long way in addressing corruption in ministries, departments and agencies [MDAs] and the country’s budget deficit and debt problems.
“The damning revelations are documented in the 2021 audited report released recently by the Office of the Auditor-General of the Federation. Hundreds of billions of naira are also reportedly missing in other MDAs.
“According to the 2021 annual audited report by the Office of the Auditor-General of the Federation, the Federal Ministry of Humanitarian Affairs and Poverty Alleviation, [the Ministry] in 2021 failed to account for over N54 billion [N54,630,000,000.00] meant to pay monthly stipends to Batch C1 N-Power volunteers and non-graduate trainees between August and December 2021.
“The money was ‘not directly paid to the beneficiaries.”‘
“The Auditor-General is concerned that the money ‘may have been diverted.’ He wants the money recovered and remitted to the treasury. He also wants suspected perpetrators of the diversion to be sanctioned in line with the Financial Regulations.
“The Ministry also reportedly failed to account for over N2.6 billion [N2,617,090,786.00] of public funds meant for the ‘home grown school feeding programme during Covid-19’, as ‘the programme was never executed.”‘
“The money was allegedly paid to five contractors to ‘procure, package and distribute Covid-19 palliatives to Kano, Zamfara and Abia states,”‘ but without any trace.
“The Auditor-General fears the money ‘may have been diverted.’ He wants the money recovered and remitted to the treasury.
“The Ministry also reportedly spent over N78 million [N78,373,909.74] to ‘carry out a survey on the Ministry’s Covid-19 response to states and vulnerable groups’ but without any approval or document.
“The Auditor-General fears the money may be missing or have ended up in the pockets of ‘incompetent contractors’. He wants the money recovered and remitted to the treasury.
“The Ministry also reportedly failed to account for N39.5 million [M39,500,000.00] ‘personal donations to different personalities’. The money ‘was paid directly to the minister as reimbursement’.
“The Auditor-General fears the ‘money may have been diverted’, resulting in ‘the loss of public funds.’ He wants the money recovered and remitted to the treasury.
“The Ministry also reportedly failed to account for N400 million [N400,000,000.00] meant to pay ‘stipends to 4450 independent monitors for October, November and December 2021.”‘
“The Auditor-General fears the money ‘may have been diverted’. He wants the money recovered and remitted to the treasury.
“The Ministry also reportedly paid over N287 million [287,628,300.00] contractors ‘without any document and justification.’ The Auditor-General fears the money ‘may have been diverted’ and wants the money recovered and remitted to the treasury.
“These allegations by the Auditor-General are different from the allegedly missing or unaccounted for N729 billion, which is the subject-matter of the judgment by Justice Deinde Dipeolu.”
