Banks Found Guilty Of Issuing New Notes To Hawkers To Pay N150m Fine
LAGOS DECEMBER 15TH (NEWSRANGERS)-The Central Bank of Nigeria has announced that it will slam a fine of N150m per branch on Deposit Money Banks found guilty of facilitating the illegal flow of mint naira notes to currency hawkers and unscrupulous agents.
The apex bank disclosed this in a circular issued on Friday, December 13, 2024, signed by the Acting Director of the Currency Operations Department, Mohammed Olayemi.
The circular revealed that the CBN is concerned about the increasing prevalence of mint naira notes being traded by hawkers, a practice the bank described as impeding efficient and effective cash distribution to customers and the general public.
The circular, which referred to an earlier directive dated November 13, 2024, highlighted the apex bank’s determination to address the commodification of the naira.
Under the directive, any branch of a financial institution found culpable will face a penalty of N150m for the first violation.
Subsequent infractions, the CBN warned, would attract stricter sanctions under the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
To ensure compliance, the apex bank stated that it would increase periodic spot checks in banking halls and ATMs while deploying mystery shoppers to uncover illicit cash hawking spots across the country.
The circular read, “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 the periodic spot checks to the banking halls/ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots across the country.
“In this regard, any erring deposit money banks or financial institutions that are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes shall be penalised at first instance N150,000,000.00 (One hundred and fifty million Naira) only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”
The CBN further urged DMBs to strengthen controls, processes, and procedures around their Cash Management Centres, branches, and teller operations to prevent their systems from being exploited for illegal transactions.
The PUNCH earlier reported that the CBN issued a stern warning to Deposit Money Banks over cash hoarding and diversion, stating that such actions will attract stiff penalties.
In a circular dated November 13, 2024, signed by the Acting Director of Currency Operations, Mohammed Olayemi, and released by the CBN, the apex bank announced intensified measures to ensure efficient and transparent cash disbursement.
The CBN reminded banks of its ongoing mystery shopping exercises and spot checks aimed at discouraging the abuse of naira notes and ensuring responsible distribution of cash, especially as the festive season approaches.
According to the circular, the initiatives are designed to prevent the flow of newly minted banknotes to hawkers and support efficient cash disbursement to the public.
The central bank stated that any DMB traced to seize cash from unauthorised hawkers would face financial penalties.
Such banks will be fined 10 per cent of the total value of cash withdrawn from the CBN on the day the offence was committed.
Repeat offenders will incur an additional five per cent penalty for each subsequent breach.
The CBN also warned against cash hoarding, diversion, and other practices that hinder cash flow, stressing that such actions violate the Clean Note Policy.
It noted that defaulters would face appropriate sanctions, which may include additional fines or other regulatory actions.
Punch
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Posted by News Rangers
on Dec 15 2024. Filed under Business, National.
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