CBN Fines 9 Banks N1.35bn for Cash Crunch
The Central Bank of Nigeria (CBN) recently imposed fines totaling N1.35 billion on nine Deposit Money Banks (DMBs) for their failure to provide Naira notes through Automated Teller Machines (ATMs) during the festive season. The banks penalized include Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc. Each bank was fined N150 million for non-compliance with the CBN’s cash distribution guidelines, following inspections at their branches.
Impact on Point-of-Sale Operators and Customers
The shortage of cash from banks, both over the counter and at ATMs, has had significant repercussions on Point-of-Sale (POS) operators and customers. POS operators have expressed frustration over the lack of cash, leading them to purchase money from alternative sources such as market vendors and petrol stations to conduct their business. This has resulted in increased charges to customers, with some POS operators reporting over 100% hikes in fees due to the cash scarcity.
Customers have also faced challenges with limited cash withdrawals at ATMs, with some banks capping daily withdrawals at N20,000 for multiple account holders. In Abuja, individuals are paying up to N800 to obtain N20,000 in cash from POS operators, highlighting the severity of the situation. The issue is even more pronounced in rural areas in the far North, where access to banking services is scarce.
Government Intervention and CBN’s Response
Vice President Kashim Shettima and the House of Representatives have both voiced concerns about the cash crunch, urging the CBN to address the issue promptly. The CBN has repeatedly cautioned financial institutions to ensure seamless cash availability, especially during periods of high demand. Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, announced that the fines imposed on the banks would be deducted directly from their accounts with the central bank.
The CBN has made it clear that further sanctions will be enforced on any institution found breaching its cash circulation guidelines. The apex bank is actively monitoring cash hoarding and rationing by both banks and POS operators and collaborating with security agencies to combat illegal cash sales and operational violations. Governor Olayemi Cardoso emphasized the importance of banks adhering to cash distribution policies to avoid severe penalties during a recent industry event.
In conclusion, the CBN’s actions aim to ensure a reliable cash supply to meet the needs of Nigerians and maintain economic stability. It is imperative for financial institutions to comply with regulatory guidelines to prevent disruptions in the country’s financial ecosystem.
