CBN Warns Banks Against Cash Hoarding Ahead of Yuletide
By Patience Ikpeme
The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) to avoid practices that could disrupt cash flow during the upcoming holiday season.
In a circular signed by Mohammed J. Olayemi, Acting Director of the Currency Operations Department, the CBN emphasized the need for responsible cash distribution and the prevention of Naira misuse.
To ensure compliance, the CBN, in collaboration with law enforcement agencies, will intensify monitoring efforts through spot inspections and mystery shopping activities. These measures aim to detect and deter unethical practices such as cash hoarding and diversion.
Banks have been instructed to implement robust internal controls to manage the distribution of newly minted banknotes effectively. Additionally, the CBN has urged DMBs to prioritize cash distribution through Automated Teller Machines (ATMs) to enhance public access to cash during the festive period.
The circular outlined strict penalties for breaches of the CBN’s guidelines: Banks linked to cash confiscated from unauthorized “hawkers” will face a penalty of 10 percent of the total amount withdrawn from the CBN on the day the infraction occurred. Repeat offenses will attract an incremental penalty of 5 percent.
Banks found hoarding cash, diverting funds, or violating the Clean Note Policy will also face severe sanctions.
The CBN’s initiatives are part of its broader efforts to combat the unauthorized sale of Naira notes, which often leads to currency misuse and deterioration.
By promoting responsible cash distribution and discouraging unethical practices, the CBN aims to ensure a stable and efficient financial system during the holiday season. These measures are also intended to prevent a recurrence of the cash shortages that have plagued previous festive periods.
The CBN reiterated its commitment to safeguarding the integrity of the Naira and fostering equitable access to cash for all Nigerians.
