CBN penalizes 9 Banks for failing to dispense cash

The Central Bank of Nigeria (CBN) has imposed a fine of ₦150 million each on nine deposit money banks for their failure to dispense cash through Automated Teller Machines (ATMs) during the yuletide season.

The total sanction amounts to ₦1.35 billion. The affected banks include Globus Bank Plc, Providus Bank Plc, Sterling Bank Plc, and six others.

Hakama Sidi Ali, Acting Director of Corporate Communications at the CBN, confirmed the development, emphasizing the regulator’s commitment to ensuring uninterrupted cash flow.

“Ensuring seamless cash flow is paramount to maintaining public trust and economic stability. The CBN will not hesitate to impose further sanctions on any institution found violating its cash circulation guidelines,” she said.

The apex bank’s investigations revealed issues of cash hoarding and rationing at some bank branches and Point-of-Sale (POS) operations, particularly during the festive period when demand for cash peaks.

To address these concerns, the CBN is collaborating with security agencies to crack down on illegal cash sales and operational breaches, including POS operators exceeding the daily cumulative withdrawal limit of ₦1.2 million.

Financial experts have lauded the CBN’s decisive action as a necessary step to uphold banking standards and maintain public confidence.

READ ALSO: CBN bars local deposits in non-resident accounts to boost Diaspora investments

Dr. Ayo Ogundipe, a financial analyst, noted, “The penalties send a strong message to banks about their responsibilities in ensuring cash availability. The festive period is critical for economic activities, and disruptions in cash flow can have a ripple effect on businesses and households.”

However, some industry stakeholders argue that the fines should be complemented by systemic reforms to address root causes of cash shortages. “The sanctions are a good start, but we also need to examine infrastructure challenges and capacity constraints that may hinder compliance with cash distribution guidelines,” said Ifeoma Eze, a banking consultant.

Governor Olayemi Cardoso reinforced the CBN’s stance during his address at the Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN) in November 2024. He warned financial institutions to strictly adhere to cash distribution policies, reiterating that severe penalties would follow any violations.

“Our focus remains on fostering trust, ensuring stability, and guaranteeing seamless cash circulation across the financial system,” Cardoso stated, emphasizing the CBN’s commitment to maintaining a robust cash buffer to meet Nigerians’ needs.

The CBN’s monitoring and enforcement activities are set to continue, with a particular focus on curbing cash hoarding and ensuring compliance with cash withdrawal policies. The apex bank has urged all financial institutions to adhere to its guidelines, warning that further violations would attract swift and decisive sanctions.

The fines imposed on the nine banks highlight the CBN’s unwavering commitment to safeguarding the integrity of the financial system and addressing the challenges of cash accessibility.

As investigations and monitoring intensify, banks are expected to align with regulatory expectations to avoid further penalties and maintain public trust.