Regulatory Alerts2024-12-14 | COD/DIR/INT/CIR/001/025Updated Penalty on Inappropriate Cash Disbursement Practices by Deposit Money Banks (DMBs)
The Central Bank of Nigeria is addressing inappropriate cash disbursement practices by deposit money banks and financial institutions, particularly the illicit flow of mint banknotes to currency hawkers. The CBN will conduct spot checks and mystery shopping to identify erring banks, with penalties of ₦150,000,000.00 per branch for the first offense and stricter penalties for subsequent offenses. All DMBs and financial institutions are advised to strengthen their controls to prevent such illicit activities.
processes and procedures around their Cash Managements Centres, Branch and Teller
l Bank of Nigeria Currency Operations Departmer Plot 33, Abubakar Tafawa Balewa Central Business District P.M.B. 0187, Garki, Abuja - Nige Email: cod@cbn.gov.ng Website: www.cbn.gov.ng Phone: +234 700-225-5226, +234 800-225-5226 December 13, 2024 Ref: COD/DIR/INT/CIR/001/025 All Deposit Money Banks UPDATED PENALTY ON INAPPROPRIATE CASH DISBURSEMENT PRACTICES BY DEPOSIT MONEY BANKS (DMBS) Please refer to the circular from Central Bank of Nigeria (CBN), with reference number COD/DIR/INT/CIR/001/021 dated November 13, 2024.
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 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 is culpable of facilitating, aiding or abetting, by direct actions or inactions, illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes, shall be penalised at first instance ₦150,000,000.00 (One hundred and fifty million Naira) only, per erring branch and at later instances apply the full weight of relevant provisions of BOFIA 2020.
Therefore, CBN enjoins all DMBs and financial institutions to strengthen controls.
Thank you for your cooperation.
Solaja, Mohammed J. Olayemi Acting Director, Currency Operations Department Operations.