CBN Warns Banks Against Diverting Mint Naira Notes, Imposes N150m Fine

The Central Bank of Nigeria (CBN) has issued a stern warning to financial institutions over the illegal distribution of newly minted naira notes. In a recent circular signed by Solaja Olayemi, Acting Director of the CBN’s Currency Operations Department, the apex bank expressed concern about the diversion of mint notes to currency hawkers and other unauthorized agents, describing the practice as detrimental to effective cash distribution.

To address this issue, the CBN announced that any deposit money bank or financial institution found complicit will face a fine of N150 million for each offending branch. The circular emphasized that repeated violations would attract the full enforcement of penalties as stipulated under the Banking and Other Financial Institutions Act (BOFIA) 2020.

The regulator also revealed plans to intensify monitoring through spot checks at banking halls, ATMs, and mystery shopping operations at known currency hawking locations. These measures are aimed at curbing the illicit flow of mint naira notes and ensuring that banks prioritize cash disbursement to legitimate customers.

The CBN called on banks to strengthen their internal controls, particularly in cash management at branches and teller points. Financial institutions were also reminded of the directive issued on November 15, mandating the prioritization of ATM cash withdrawals to enhance currency accessibility.

Additionally, the apex bank reiterated its stance against cash hoarding, diversion, or any activities that violate the Clean Note Policy. Banks engaging in such practices, including actions that hinder proper currency distribution, were warned of severe penalties.