CBN to inject N1.4trn to ease cash flow within Nigeria’s banking system

The Central Bank of Nigeria (CBN) has announced plans to inject N1.4 trillion into the banking system over the next three months to improve cash flow and alleviate issues surrounding cash availability.

CBN Governor Olayemi Cardoso made this disclosure during a press conference in Abuja on Tuesday, emphasizing the bank’s commitment to ensuring sufficient cash in circulation, particularly through automated teller machines (ATMs).

Addressing concerns over persistent cash shortages at ATMs, Cardoso stressed that banks have no excuse for failing to dispense cash, given the apex bank’s efforts.

“Another N1.4 trillion is likely to be delivered in the next three months to support the circulation of cash,” Cardoso said. “We are doing everything possible to ensure there is sufficient cash in the system. Banks must effectively dispense cash to meet demand.”

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The CBN has also established a monitoring and spot-checking system to ensure compliance by deposit money banks. Cardoso warned that banks failing to meet these obligations will face sanctions.

“If they are not dispensing cash as expected, there will be penalties. We are working closely with banks to make sure the cash reaches the intended locations and is available for withdrawal,” he added.

This announcement comes after a period of severe cash shortages, which began late last year. On November 2, 2023, the CBN attributed the scarcity to a high volume of withdrawals and panic-driven actions by customers.

The situation worsened into early 2024, with the CBN citing cash hoarding as a major issue, claiming much of the cash distributed to banks was being held by individuals. Despite assurances of adequate cash reserves, the shortage persisted, leading some commercial banks to impose withdrawal limits at ATMs.

As the CBN prepares to pump more cash into circulation, Cardoso reassured Nigerians that all stakeholders are expected to play their part in resolving the issue and maintaining smooth cash flow within the economy.