Naira Scarcity: CBN fines First Bank, UBA, Zenith Bank, 6 others N150m each for hoarding cash

*The Central Bank of Nigeria sanctions nine the First Bank of Nigeria Limited, Union Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and five other financial institutions N150 million each for causing cash flow disruptions, not making Naira notes available through their Automated Teller Machines, especially during the Yuletide season in the West African country

Isola Moses | ConsumerConnect

For failure to comply with the banking sector regulator’s cash distribution guidelines, the Central Bank of Nigeria (CBN) has sanctioned nine Deposit Money Banks (DMBs), including First Bank of Nigeria Limited, Union Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and five other financial institutions N150 million each.

ConsumerConnect reports the CBN wielded the big stick against the nine banks for failing to make Naira notes available through their Automated Teller Machines (ATMs) especially during the Yuletide season.

Uncovering cash-hoarding practices at banks’ branches

The Bankers’ Bank disclosed that, following its regulatory spot checks on the banks’ branches, had uncovered the infractions and fined them N150 million each for non-compliance with the CBN’s cash distribution guidelines in the country.

ATM cash withdrawal

The nine affected banks are 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.

The enforcement action follows repeated warnings from the CBN to financial institutions to guarantee seamless cash availability, particularly during periods of high demand in Nigeria.

Effortlessly, the fines imposed on each erring bank would be debited directly from their accounts with the CBN, noted the regulator.

Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications at CBN, who confirmed the development stated: “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.”

The banking sector regulator also assured that its investigations and monitoring would continue to scrutinise cash hoarding and rationing, both at bank branches and by Point-of-Sale (PoS) operators.

According to the Acting Director of Corporate Communications, the Central Bank is working with security agencies to crack down on illegal cash sales and operational violations, including enforcing PoS operators’ daily cumulative withdrawal limit of N1.2 million.

The Bank, therefore, urged all financial institutions in the country to comply with its guidelines.

It further warned that further violations of these regulations would attract swift and decisive sanctions.

On CBN’s directive to strictly adhere to cash distribution policies

It is recalled that Dr. Olayemi Cardoso, Governor of CBN, in his address at the Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) November 2024, had warned banks and other financial institutions to strictly adhere to cash distribution policies or face severe penalties.

Cardoso reiterated the CBN’s commitment to maintaining a robust cash buffer to meet Nigerian consumers’ needs.

He also said: “Our focus remains on fostering trust, ensuring stability, and guaranteeing seamless cash circulation across the financial system.”