Korede Abdullah in Lagos
Nigeria’s Central Bank (CBN) has imposed a ₦150 million fine on deposit money banks and financial institutions caught selling newly minted banknotes to currency hawkers.
The details of the fine, contained in a Friday circular, come as Nigeria grapples with a prolonged cash shortage that has left customers struggling to access cash at ATMs and over-the-counter
The CBN expressed dismay over the “prevalence of illicit flow of mint banknotes to currency hawkers and other unscrupulous economic agents that commodify naira banknotes.”
The cash crisis began in late 2022 with the CBN’s currency redesign policy, aimed at curbing counterfeit currency and reducing cash outside of banks.
However, the policy had an unintended effect, leading to widespread frustration among citizens. The shortage has continued, driving demand for cash via alternative channels, including POS agents sourcing banknotes from informal traders.
Beyond POS agents, currency hawkers buying fresh notes from banks and reselling them at a markup have exacerbated the problem.
In response to the new fine, several banks have stopped disbursing mint banknotes over the counter.
The CBN warned that erring banks would face penalties: “Any erring deposit money banks or financial institution… shall be penalised at first instance ₦150 million per erring branch.”
It remains unclear whether fines will solve the systemic problem incentivizing cash-heavy businesses to sell banknotes to POS agents, reducing cash availability at banks.
