The Central Bank of Nigeria (CBN) has introduced a ₦150 million fine for Deposit Money Banks (DMBs) found guilty of illegally distributing mint naira notes to currency hawkers across the country.
This measure, aimed at curbing the commodification of naira notes, is intended to ensure an efficient cash distribution system and uphold the integrity of Nigeria’s currency.
CBN’s Warning and Clarification
In a statement signed by Sidi Ali Hakama, Acting Director of Corporate Communications, the CBN emphasized that all naira denominations remain valid legal tender, as affirmed by the Supreme Court ruling of November 29, 2023. The bank also warned against hoarding and reiterated its commitment to ensuring fair cash access for Nigerians.
A circular issued on Friday by Mohammed Olayemi, Acting Director of Currency Operations, expressed concern over the increasing prevalence of mint notes being traded by hawkers. The CBN described this trend as disruptive to effective cash distribution and detrimental to the financial ecosystem.
Penalties and Enforcement
The circular reaffirmed the apex bank’s resolve to tackle the illicit flow of naira notes, referring to an earlier directive dated November 13, 2024.
Under the new directive:
- A ₦150 million penalty will be imposed on any bank branch found culpable for a first-time violation.
- Repeat offenders will face stricter sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020.
The CBN plans to enforce compliance through intensified spot checks in banking halls and ATMs and by deploying mystery shoppers to identify cash hawking hotspots.
The circular stated:
“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 to banks’ customers and the general public.
“CBN will continue to intensify periodic spot checks at banking halls and ATMs to review cash payouts, as well as mystery shopping at all identified cash hawking spots across the country.”
Strengthening Internal Controls
The CBN also urged DMBs to bolster controls and processes around their cash management centers, branches, and teller operations. This is to prevent their systems from being exploited for illegal transactions involving naira notes.
The apex bank’s initiative underscores its commitment to safeguarding the integrity of the naira and ensuring equitable access to cash for all Nigerians.
