The Central Bank of Nigeria (CBN) has imposed a fine of N150 million on Deposit Money Banks (DMBs) found guilty of selling new naira notes to currency hawkers.This move comes as the apex bank intensifies its efforts to address the scarcity of cash in the country.
The CBN's decision is contained in a circular issued by the Acting Director of Currency Operations, Mohammed Olayemi, on December 13, 2024.The circular referenced an earlier directive dated November 13, 2024, and expressed the CBN's dismay at the continued commodification of naira banknotes.
According to the CBN, the practice of selling new naira notes to currency hawkers is impeding efficient and effective cash distribution to customers and the general public.The apex bank described the practice as detrimental to the economy and compromising the integrity of Nigeria's currency management system
The CBN has warned that any branch of a financial institution found guilty of selling new naira notes to currency hawkers will face a penalty of N150 million for the first violation ¹. Subsequent infractions will attract stricter sanctions under the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
To ensure compliance, the CBN will increase periodic spot checks in banking halls and ATMs while deploying mystery shoppers to uncover illicit cash hawking spots across the country.
The CBN's move to impose a fine on banks selling new naira notes to currency hawkers is part of its efforts to address the scarcity of cash in the country ². The apex bank has been working to ensure that banks have sufficient cash to meet the demands of their customers.
In a statement, the CBN reaffirmed that the old N1000, N500, and N200 banknotes remain valid legal tender in line with a Supreme Court ruling issued on November 29, 2023 ². The apex bank warned against hoarding and urged Nigerians to report any bank or financial institution found hoarding cash.
The CBN's decision to impose a fine on banks selling new naira notes to currency hawkers has significant implications for the economy. The move is expected to help reduce the scarcity of cash in the country and promote efficient and effective cash distribution to customers and the general public.
However, some experts have expressed concerns that the fine may not be sufficient to deter banks from engaging in the practice ³. They argue that the fine should be higher to serve as a deterrent to erring banks.
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