As the yuletide season nears, Nigerian banks will need to curb their practice of selling cash to hawkers at parties as the Central Bank of Nigeria (CBN) plans to carry out routine investigations against lenders engaged in the practices.
The selling of mint notes is a common feature of parties in the country, and this has led to the unavailability of the much-needed notes in ATMs, insiders told Investors King.
CBN in a memo gave a stern warning to Deposits Money Banks (DMBs) on Friday in Abuja that it would heavily penalise Deposit Money Banks (DMBs) found supporting the hawking of Naira notes.
It added that banks to whom cash seized from hawkers of cash is traced, will be penalised 10 percent of the total value of cash withdrawn on the day the seized cash was withdrawn from the CBN.
The statement signed by Mr Solaja Olayemi, Acting Director, Currency Operations Department, CBN, said the apex bank would engage in mystery shopping exercises and periodic spot checks on cash distribution and disbursement activities of DMBs to ascertain the source of such Naira notes.
The CBN also said that the initiatives were introduced to monitor and prevent practices that facilitate the flow of mint banknotes to hawkers of Naira cash, thereby discouraging abuse of the Naira.
It added that the initiatives would also ensure that DMBs support efficient and responsible cash disbursement to the public.
It was also warned that after the first penalty of 10 per cent, every subsequent offense will be charged an incremental penalty of five per cent.
“DMBs found engaging in cash hoarding, diversion, or any actions that hinder efficient cash distribution, including violations of the Clean Note Policy, will incur appropriate sanctions,” the statement noted.
The CBN urged DMBs to implement internal controls for responsible disbursement and accountability in respect of mint banknotes payouts at their outlets, as the yuletide season approached, with an anticipated increase in cash demand,
“To enhance public access to cash, we encourage banks to prioritise cash distribution through Automated Teller Machines (ATMs).
“During this season, the CBN, in collaboration with relevant law enforcement agencies, will intensify spot checks and mystery shopping activities to monitor and enforce responsible cash distribution and prevent Naira abuse.”
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