CBN cracks down on hawking new naira notes to combat illicit cash flow
In response to growing concerns over the illegal trading of new naira notes, the Central Bank of Nigeria (CBN) is implementing strict measures to safeguard the integrity of the currency and prevent illicit cash flows.
As part of this effort, the bank announced a significant fine of N150 million for Deposit Money Banks (DMBs) found to be facilitating such activities.
A formal circular issued on Friday, December 13, 2024, signed by Mohammed Olayemi, the Acting Director of the Currency Operations Department, who expressed grave disapproval of the hawking practice.
The CBN has long campaigned against the commodification of the naira and previously warned, in a November 13, 2024 circular, against the trade of naira notes by unscrupulous agents.
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This announcement comes amid ongoing cash shortages in the country, a situation the CBN is diligently working to rectify. The bank has urged DMBs to enhance the distribution of cash to ensure availability for Nigerians.
During a recent annual Bankers’ Dinner hosted by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, CBN Governor Olayemi Cardoso reassured attendees that the bank is committed to maintaining a robust cash supply, particularly during peak demand periods such as the festive season and year-end.
He said, “To address this, we are conducting spot checks across the Deposit Money banks, and we impose penalties on the underperforming institutions. Effective December 1. 2024, customers are encouraged to report any difficulties with joint cash from bank branches or ATMs directly to the CBN through designated phone numbers and email addresses for their respective states.
“Guidelines will be distributed widely to raise public awareness. We will also urge full regulative compliance by all stakeholders, including mobile money operators and POS agents, to promote digital transaction channels and improve service delivery. I repeat, financial institutions found engaging in malpractices or sabotage will face changing penalties.”
But the cash scarcity has persisted but despite this there have been reports of hawking of mint naira notes.
But the latest circular by the CBN said the apex bank is concerned about the increasing prevalence of mint naira notes being traded by hawkers.
The bank stated that the practice is impeding efficient and effective cash distribution to customers and the general public.
In the earlier circular issued in November, the apex bank stated that any branch of a financial institution found culpable will face a penalty of N150m for the first violation.
Subsequent infractions, the CBN stated, would attract stricter sanctions under the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The circular read, “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 the 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 are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes shall be penalised at first instance N150,000,000.00 (One hundred and fifty million Naira) only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”
In another development, the CBN has clarified that the old naira notes of N1000, N500 and N200 remain valid.
The bank stated that it has observed the misinformation regarding the validity of the old ₦1000, ₦500, and ₦200 banknotes currently in circulation.
Ag. Director, Corporate Communications, Mrs. Sidi Ali Hakama explained that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the ₦1000, ₦500, and ₦200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadline.
“We, therefore, advise the public to disregard any claims that the old series of the aforementioned banknotes will cease to be legal tender on December 31, 2024. We urge Nigerians to continue accepting all Naira banknotes (both old and redesigned) for their daily transactions and to handle them with care to ensure their longevity.
“Furthermore, the general public is encouraged to embrace alternative modes of payment, such as e-channels, to reduce pressure on using physical cash.”
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