CBN Fines 9 Banks N1.35bn Over Failure to Dispense Cash via ATMs

•To intensify spot checks for compliance

James Emejo in Abuja and Nume Ekeghe in Lagos

The Central Bank of Nigeria (CBN) yesterday announced that it has imposed fines amounting to N1.35 billion on nine Deposit Money Banks (DMBs) over their failure to make Naira notes available through automated teller machines (ATMs) during the yuletide season.

The central bank further disclosed that the affected banks were fined N150 million each for non-compliance, in line with the CBN’s cash distribution guidelines, following spot checks on their branches.

CBN acting Director, Corporate Communications Department, Mrs. Hakama Sidi Ali confirmed the development in a statement, noting that “ensuring seamless cash flow is paramount to maintaining public trust and economic stability”.

The apex bank pointed out that the enforcement action followed repeated warnings from the CBN to financial institutions to guarantee seamless cash availability, particularly during periods of high demand.

According to the central bank, the affected banks included Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, and Union Bank Plc.

Others are Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc.

The CBN further noted that it had communicated with the banks that the fines would be debited directly from their accounts with the apex bank.

Sidi Ali said, “The CBN will not hesitate to impose further sanctions on any institution found violating its cash circulation guidelines.”

She added that the CBN’s investigations and monitoring will continue to scrutinise cash hoarding and rationing, both at bank branches and by Point-of-Sale (POS) operators.

She also said the central bank was working with security agencies to crack down on illegal cash sales and operational violations, including enforcing POS operators’ daily cumulative withdrawal limit of N1.2 million.

In his address at the Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in November 2024, CBN Governor, Mr. Olayemi Cardoso, warned banks to strictly adhere to cash distribution policies or face severe penalties.

He underscored the CBN’s commitment to maintaining a robust cash buffer to meet Nigerians’ needs, adding “Our focus remains on fostering trust, ensuring stability, and guaranteeing seamless cash circulation across the financial system.”

The CBN however, urged all financial institutions to comply with its guidelines, warning that further violations would attract swift and decisive sanctions.

On December 14, the CBN threatened to impose N150 million fine, at first instance, on any erring Deposit Money Bank or financial institution that facilitate, aid or abet by direct actions or inactions, illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes.

The apex bank disclosed this in a circular titled, “Updated Penalty on Inappropriate Cash Disbursement Practices by Deposit Money Banks (DMBS)”which was addressed to all DMBs, dated December 14 and signed by both CBN acting Director, Currency Operations Department, Solaja, Olayemi and acting Director, Branch Operations, Dr. Isa-Olatinwo, Aisha.

The bank explained that the fine would be apply per erring branch and at later instances apply the full weight of relevant provisions of BOFIA 2020.

The central bank said it had 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 general public.

The bank said it would 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.

The apex bank, therefore, urged all DMBs and financial institutions to strengthen controls, processes and procedures around their cash managements centres, branch and teller operations.

The CBN had earlier directed to ensure efficient cash disbursement to customers Over-the-Counter (OTC) and through ATMs, vowing to intensify its oversight roles to enforce the directive and ensure compliance.

The apex bank further encouraged members of the public who are unable to obtain cash Over-the-Counter or through ATMs at DMBs to report these instances using the designated reporting channels and format provided.