…Orders Banks to Prioritize ATM Cash Disbursement
Korede Abdullah in Lagos
The Central Bank of Nigeria (CBN) has issued a directive to banks, prioritizing cash disbursement through automated teller machines (ATMs) to ensure efficient and responsible cash distribution to the public.
“For the avoidance of doubt, it should be noted that DMBs to whom cash seized from “hawkers of cash are traced will be penalized 10% of the total value of cash withdrawn on the day the seized cash was withdrawn from the Central Bank of Nigeria (CBN). Every subsequent offense will be charged incremental penalty of 5%”, the apex bank threatens.
According to the CBN in a circular dated November 13, 2024, this move aims to prevent the misuse of mint banknotes by individuals selling naira notes.
The directive was outlined in the circular titled “Mystery shopping & spot checks on cash disbursement activities of deposit money banks” and signed by Solaja Olayemi, Acting Director of the Currency Operations Department.
By doing so, the CBN seeks to maintain transparency and accountability in cash transactions, promoting a more secure and reliable financial system.
This directive is part of the CBN’s ongoing efforts to regulate cash handling and prevent illicit activities, ultimately safeguarding the integrity of Nigeria’s financial sector.
“Please refer to the subsisting circular on mystery shopping exercise and periodic spot checks on cash distribution/disbursement activities of Deposit % money Banks (DMBs),” the circular reads in part.
“As you will recall, these initiatives were introduced to: 1. Monitor and prevent practices that facilitate flow of mint banknotes to “hawkers” of naira cash, thereby discouraging abuse of the Naira; and 2. Ensure that DMBs support efficient and responsible cash disbursement to the public.”
Nigerians have been facing a challenging time accessing cash from bank ATMs, leading many to rely on point of sale (POS) operators.
The CBN’s move aims to prevent the misuse of banknotes and ensure a more efficient distribution of cash.
“Every subsequent offense will be charged incremental penalty of 5%.”, the CBN cautioned.
The CBN gave a warning that banks found engaging in cash hoarding, diversion, or any actions that hinder efficient cash distribution, “including violations of the Clean Note Policy, will incur appropriate sanctions”.
“As we approach the yuletide season, with an anticipated increase in cash demand. DMBs are advised to implement internal controls for responsible disbursement and accountability in respect of mint banknotes payouts at their outlets,” CBN said.
“To enhance access to cash, we encourage banks to prioritize cash distribution through ATMs.”
The CBN said it’s taking measures to prevent naira abuse during the yuletide season by collaborating with law enforcement agencies to intensify spot checks and mystery shopping activities.
This move aims to monitor and enforce responsible cash distribution, ensuring that banks prioritize cash distribution through Automated Teller Machines (ATMs) and prevent the hawking of naira notes.
