CBN to Impose 10% Fine on Banks Hoarding, Diverting Cash
James Emejo in Abuja
The Central Bank of Nigeria (CBN) yesterday said it would impose stiff penalties against any bank found to have engaged in currency hoarding and diversion.
The CBN announced stringent penalties for Deposit Money Banks (DMBs) found diverting cash to hawkers, as part of its ongoing efforts to ensure responsible currency distribution.
It said any bank linked to cash seized from hawkers would face a 10 per cent fine on the total value of the withdrawn funds, adding that subsequent violations will attract an incremental penalty of 5 per cent penalty.
The apex bank conveyed the warning via a circular dated November 13, 2024, signed by CBN acting Director, Currency Operations, Mr. Muhammad Olayemi.
The directive came against the backdrop of public outcry over limited access to cash, particularly in Automated Teller Machines (ATMs).
The Bank noted that its ongoing mystery shopping exercises and spot checks are aimed at discouraging the abuse of naira notes as well as ensuring responsible distribution of cash, particularly as the festive season nears.
The central bank further explained that the current moves are towards preventing the flow of newly minted banknotes to hawkers and support efficient cash disbursement to the public.
The CBN further warned that any bank traced to seized cash from unauthorised hawkers would face financial sanction, adding that affected banks would be fined 10 per cent of the total value of cash withdrawn from the CBN on the day the offence was committed.
The central bank added that repeat infractions will incur an additional five per cent penalty for each subsequent breach.
The apex bank also warned against cash hoarding, diversion, and other practices that hinder cash flow, stressing that such actions breach the Clean Note Policy.
The Bank added that defaulters would face appropriate punitive measures including additional fines or other regulatory actions.
Similarly, the CBN further directed banks to prioritise cash disbursement through ATMs.
In a statement by CBN acting Director, Currency Operations Department, Mr. Solaja Olayemi, the Bank disclosed that banks disbursing naira notes to persons hawking the currency will be sanctioned.
