Emmanuel Ochayi
The Central Bank of Nigeria (CBN) has imposed a N150 million fine on Deposit Money Banks (DMBs) found guilty of supporting the illegal trade of mint naira notes. This move is part of the CBN’s broader effort to protect the integrity of Nigeria’s currency and ensure fair cash distribution.
In a circular dated December 13, 2024, and signed by Solaja Mohammed J. Olayemi, acting director of currency operations, the CBN expressed disappointment at the continued practice of naira hawking. The document referenced an earlier notice from November 13, 2024, which had already cautioned banks against enabling the flow of new naira notes to currency hawkers.
Join our WhatsApp Channel“This practice is a threat to the economy and disrupts proper cash distribution to bank customers and the public,” the CBN stated in the circular.
CBN to Conduct Spot Checks and Mystery Shopping
The CBN announced that it would increase spot checks on banking halls and ATMs to ensure that cash payouts align with banking regulations. Additionally, the CBN plans to conduct “mystery shopping” at known cash hawking hotspots nationwide to track the flow of mint notes.
“We will not relent in ensuring that currency hawking is curtailed,” a CBN official said on condition of anonymity. “This measure is not just punitive; it’s a strategy to protect the integrity of the Naira.”
Fines and Sanctions for Violators
Banks found guilty of aiding naira hawking will face a fine of N150 million per violating branch. Repeat offenders will be dealt with under the full provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, which allows for stiffer penalties.
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The CBN’s circular clearly outlines the consequences for non-compliance. “Any institution that continues to flout these directives will face serious sanctions,” the apex bank stated.
A banker, speaking anonymously, noted that while the CBN’s actions are justified, banks require better tools to track and manage cash flows. “The CBN’s directive is a positive step, but banks also need stronger systems to track where cash goes once it leaves the banking halls,” the banker said.
Banks Directed to Improve Internal Controls
As part of the new measures, the CBN has ordered DMBs and other financial institutions to strengthen their internal processes for cash handling. Banks are expected to tighten controls in cash management centres, branches, and teller operations to prevent leakages that allow new notes to reach currency hawkers.
According to the CBN, these new directives are essential to ensuring fair cash flow within the Nigerian economy. “This is a shared responsibility,” a CBN official explained. “We expect all stakeholders in the financial system to play their part in safeguarding the integrity of the Naira.”
CBN’s Broader Efforts to Clean Up the Financial System
The fine is one of several initiatives by the CBN to sanitize Nigeria’s financial system. By taking a zero-tolerance approach, the CBN aims to prevent activities that compromise the naira’s status and ensure equitable access to cash for all citizens.
Observers say the fines could send a strong message to banks and other financial institutions. “If this policy is enforced strictly, it will deter banks from engaging in illegal practices related to cash handling,” a financial analyst commented.
The CBN’s action reflects its commitment to reducing financial misconduct and maintaining currency stability. The central bank’s enhanced monitoring strategy and hefty fines are seen as a crucial step toward achieving this goal. As the crackdown intensifies, many will be watching to see if banks strengthen their compliance measures or face even harsher penalties under BOFIA 2020.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
