CBN Imposes Fine On Banks Releasing New Notes To Hawkers

The Central Bank of Nigeria (CBN) has imposed a fine of N150 million on Deposit Money Banks found guilty of illegally distributing mint naira notes to currency hawkers around the country.

The action came after the central bank addressed recent misconceptions over the authenticity of old N1000, N500, and N200 banknotes that are still in circulation.

A statement signed by Sidi Ali Hakama, interim director of corporate communications, confirmed that these denominations remained lawful tender in accordance with a Supreme Court order given on November 29, 2023, and warned against hoarding.

Following the clarification, the CBN, in a circular signed by the Acting Director of the Currency Operations Department, Mohammed Olayemi, on Friday, expressed worry over the increased frequency of mint naira notes being exchanged by hawkers.

The CBN characterized the practice as obstructing efficient and effective cash delivery to consumers and the broader public.

The circular, which alluded to a previous instruction dated November 13, 2024, emphasized the central bank’s intention to combat the commercialization of the naira.

According to the regulation, every branch of a financial institution found guilty will face a fine of N150 million for the first infringement.

Subsequent violations, the CBN warned, will result in harsher punishments under the Banks and Other Financial Institutions Act (BOFIA) 2020.

To ensure compliance, the apex bank announced that it would conduct more frequent spot checks at banking halls and ATMs, as well as deploy secret shoppers to find unlawful cash hawking locations 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 also advised DMBs to enhance controls, processes, and procedures surrounding their Cash Management Centres, branches, and teller operations to avoid their systems from being used for unlawful activities.