In a move that sent shockwaves through the Nigerian banking sector, the Central Bank of Nigeria (CBN) recently imposed hefty fines on nine Deposit Money Banks (DMBs) for their failure to adequately stock ATMs with naira notes during the recent festive season.
This punitive measure stems from the CBN’s stringent cash distribution guidelines, which aim to prevent cash shortages and ensure smooth financial transactions for Nigerians, particularly during periods of heightened demand, such as holidays.
Despite repeated warnings from the apex bank, these institutions evidently failed to meet these crucial obligations, leading to widespread public frustration and disruption.
The list of penalized institutions includes some of Nigeria’s largest banks, namely: Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc. Each bank was slapped with a substantial fine of N150 million, amounting to a collective penalty of N1.35 billion.
The CBN made it clear that these fines would be directly debited from the banks’ accounts, sending a strong message that non-compliance will not be tolerated.
“Ensuring seamless cash flow is paramount to maintaining public trust and economic stability,” emphasized Hakama Sidi Ali, acting director of corporate communications at the CBN.
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“The CBN will not hesitate to impose further sanctions on any institution found violating its cash circulation guidelines.”
This decisive action underscores the apex bank’s unwavering commitment to ensuring seamless cash circulation and maintaining public trust in the financial system.
The CBN’s crackdown extends beyond ATM availability. The apex bank is actively investigating and monitoring instances of cash hoarding and rationing at both bank branches and by Point-of-Sale (POS) operators.
Furthermore, the CBN is collaborating with security agencies to curb illegal cash sales and enforce regulations, including the daily cumulative withdrawal limit of N1.2 million for POS operators.
This decisive action follows a stern warning issued by CBN Governor Olayemi Cardoso at the annual bankers’ dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in November 2024. Governor Cardoso unequivocally stated that banks must strictly adhere to cash distribution policies or face severe consequences.
He emphasized the CBN’s unwavering commitment to maintaining a robust cash buffer to effectively meet the needs of Nigerians. “Our focus remains on fostering trust, ensuring stability, and guaranteeing seamless cash circulation across the financial system,” he declared.
The CBN has unequivocally urged all financial institutions to adhere to its guidelines. The message is clear: any further violations will be met with swift and decisive sanctions.
This firm stance by the apex bank signals a renewed commitment to upholding the integrity of the Nigerian financial system and ensuring the smooth functioning of the economy for all citizens.