New Naira Notes: CBN Slams Banks with ₦150m Fines

The Central Bank of Nigeria imposes ₦150 million fines on banks for non-compliance with the circulation of new naira notes, ensuring strict adherence to currency policies.

In a determined move to stop the unauthorized distribution of newly issued naira notes, the Central Bank of Nigeria (CBN) has declared that any Deposit Money Bank (DMB) found involved in such activities will face a penalty of N150 million per branch.

The initiative, designed to stop the unlawful distribution of mint naira notes to currency hawkers and other unscrupulous agents, aims to tackle what the CBN identifies as an increasing issue that disrupts fair cash distribution in the nation.

A circular dated December 13, 2024, and signed by Mohammed J. Olayemi, the Acting Director of the Currency Operations Department, conveyed the concerns of the apex bank.

It highlighted the growing trend of selling new naira notes at cash hawking sites, a practice that has faced strong criticism from stakeholders.

Citing a previous directive from November 13, 2024, the CBN reiterated its dedication to combating these illegal activities. A first-time offense by any bank branch will incur a N150 million fine, with further violations resulting in tougher penalties as outlined in the Banks and Other Financial Institutions Act (BOFIA) of 2020.

The central bank also announced plans to enhance inspections, which include unannounced audits of banking facilities and ATMs, aimed at monitoring cash management practices. Additionally, mystery shopping operations will be carried out to detect areas where cash hawking is prevalent and identify the banks that facilitate these activities.

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The circular highlighted: “The CBN is concerned about the widespread illegal distribution of mint banknotes to currency sellers and other unethical economic entities that monetize Naira notes, hindering efficient and effective cash distribution to both banks’ customers and the general public.”

The CBN will enhance the frequency of spot checks at banking halls and ATMs to monitor cash payouts to bank customers, as well as conduct mystery shopping at various identified locations where cash hawking occurs nationwide.

In this context, any deposit money banks or financial institutions found guilty of facilitating the illegal distribution of mint banknotes to currency hawkers and unscrupulous economic agents—whether through direct actions or inactions—will face an initial penalty of N150,000,000.00 (One hundred and fifty million Naira) per offending branch. For subsequent violations, they will be subject to the full consequences outlined in BOFIA 2020.

The CBN urged financial institutions to strengthen internal controls and cash management procedures in Cash Management Centres, branches, and teller operations to safeguard against exploitation of their cash distribution systems.