The Central Bank of Nigeria (CBN) has announced a N150 million penalty per branch for Deposit Money Banks (DMBs) involved in the illegal distribution of freshly minted Naira notes to currency hawkers and unscrupulous agents.
This decision, outlined in a circular dated December 13, 2024, and signed by Mohammed J. Olayemi, Acting Director of the Currency Operations Department, comes in response to the growing issue of cash hawking, where newly issued Naira notes are sold openly in markets and public spaces. According to the CBN, the fine will be imposed for the first instance of a violation by any bank branch found to have facilitated, assisted, or abetted the illegal flow of mint notes to hawkers. For subsequent violations, the penalty will be more severe, in accordance with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The CBN expressed deep concern about the increasing trend of cash hawking, which it argues disrupts the proper circulation of currency and erodes public trust in the financial system. The apex bank highlighted that this practice not only hampers the efficient distribution of cash across the country but also damages the integrity of the banking sector.
To ensure compliance, the CBN has outlined plans for periodic spot checks in banking halls and ATMs, with a focus on monitoring cash disbursement practices. In addition, the bank will conduct “mystery shopping” exercises to identify hotspots for cash hawking and expose the banks involved in the illegal trade.
Beyond the financial penalties, the CBN has urged financial institutions to strengthen their internal controls and procedures surrounding cash management. The bank emphasized that measures must be taken to tighten operations at Cash Management Centres, branches, and teller points to prevent the misuse of cash distribution systems.
The circular stated, “This directive underscores the CBN’s resolve to address the illegal activities undermining efficient cash distribution and to safeguard the integrity of the Nigerian financial system.”
The CBN further called on banks to proactively monitor and secure their cash distribution processes, warning that failure to comply would result in severe consequences. This move is part of the CBN’s broader efforts to uphold the value of the Naira and promote responsible cash management across the nation.
