CBN Threatens N150m Fine for Banks Abetting Mint Naira Sales

The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) involved in the illegal flow of mint naira notes to currency hawkers and other unauthorised agents.

The apex bank disclosed that any branch found culpable would face a fine of N150 million, with stricter penalties for repeat violations.

In a circular dated Friday, 13th December 2024, and signed by the Acting Director of the Currency Operations Department, Mohammed Olayemi, the CBN expressed concern over the increasing prevalence of hawkers trading in newly minted naira notes.

The apex bank described this practice as an obstacle to efficient cash distribution to customers and the public, which undermines its Clean Note Policy.

“The CBN has 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,” the circular stated.

Under the directive, the CBN revealed that a first violation by any branch of a DMB would attract a fine of N150 million.

Subsequent infractions would result in even harsher sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020.

The bank also emphasised its commitment to eradicating the abuse of naira notes by increasing spot checks in banking halls and ATMs and deploying mystery shoppers to uncover illicit cash trading spots across the country.

“The CBN will continue to intensify periodic spot checks to banking halls and ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots,” the circular added.

The apex bank urged financial institutions to fortify their Cash Management Centres, branch operations, and teller procedures to prevent system exploitation for illegal transactions.

It reiterated the need for strict adherence to its Clean Note Policy to maintain the integrity of the national currency.

The CBN’s circular further addressed issues of cash hoarding and diversion by DMBs, warning that such practices would attract severe penalties.

For instance, any bank traced to illicitly seizing cash from unauthorised hawkers would be fined 10 per cent of the total value of cash withdrawn from the CBN on the day of the offence.

Repeat offenders would incur an additional five per cent penalty for each subsequent breach.

These measures are part of intensified efforts to ensure the transparent and equitable distribution of cash, particularly during the festive season.

The central bank stated that such initiatives are designed to curb the commodification of naira notes and ensure the effective flow of cash to the public.

The CBN’s renewed vigilance underscores its determination to maintain the sanctity of the naira and uphold public confidence in the nation’s financial system.

Financial institutions are now on notice, as the apex bank has pledged to enforce compliance with full regulatory authority.