CBN Cracks Down on Banks: Empty ATMs and Cash Hawking Draw Heavy Penalties
Banks face 10% penalty on daily withdrawals as Central Bank intensifies monitoring ahead of holiday season
The Central Bank of Nigeria (CBN) has launched a severe crackdown on banks that fail to maintain functional ATMs or are caught selling ‘mint’ cash to currency hawkers, following widespread public outcry over empty ATMs while Point of Sale (POS) merchants maintain steady cash supplies.
Steep Penalties for Non-Compliance
“For the avoidance of doubt, it should be noted that DMBs, to whom cash seized from hawkers is traced, will be penalised 10 per cent of the total value of cash withdrawn on the day the seized cash was withdrawn from the CBN,” warned Solaja Olayemi, CBN’s acting director for currency operations, in a memo issued to banks on Friday.
The penalties will escalate for repeat offenders, with Olayemi stating that “every subsequent offence will be charged an incremental penalty of five per cent.” The central bank also promised strict action against “DMBs found engaging in cash hoarding, diversion, or any actions that hinder efficient cash distribution, including violations of the Clean Note Policy.”
To enforce these regulations, the CBN will implement what Olayemi describes as “mystery shopping” exercises and periodic “spot checks” on cash distribution activities. These surprise inspections aim to track the journey of banknotes and identify banks that may be supplying currency to unauthorized hawkers.
With the approaching holiday season and its traditionally higher cash demands, the CBN has instructed banks to strengthen their internal controls. “To enhance public access to cash, we encourage banks to prioritise cash distribution through Automated Teller Machines (ATMs),” Olayemi emphasized.
The apex bank is not working alone in this initiative. “During this season, the CBN, in collaboration with relevant law enforcement agencies, will intensify spot checks and mystery shopping activities to monitor and enforce responsible cash distribution and prevent naira abuse,” Olayemi confirmed.
The CBN’s intervention comes amid growing frustration from Nigerians who have taken to social media to complain about non-functional bank ATMs, forcing them to rely on POS operators who charge additional fees for cash access. This disparity in cash availability between banks and POS merchants has raised concerns about possible collusion and cash diversion, prompting the central bank’s decisive action to restore order to the country’s cash distribution system.
