CBN Directs Banks to Prioritize Cash Distribution via ATMs, Issues Warning on Illegal Sale of Naira Notes

The Central Bank of Nigeria (CBN) has directed banks to prioritize the distribution of cash via Automated Teller Machines (ATMs).

In a circular issued to banks on Friday, Solaja Olayemi, the acting director of the CBN’s Currency Operations Department, warned against distributing naira notes to individuals engaged in the illegal sale of the currency.

The CBN also announced that it had started conducting spot checks to ensure effective and responsible cash distribution to the public, as well as to prevent the release of mint banknotes to those selling naira notes unlawfully.

The circular reminded banks of an existing directive regarding “mystery shopping” and periodic checks on the cash distribution practices of Deposit Money Banks (DMBs). These measures were introduced to:

1. Monitor and prevent the flow of mint banknotes to “hawkers” of naira currency, discouraging abuse of the naira.

2. Ensure DMBs facilitate efficient and responsible cash disbursement to the public.

For clarity, the CBN stated that DMBs found with cash seized from currency hawkers will face a penalty of 10% of the total value of cash withdrawn on the day the seized cash was originally withdrawn from the CBN. A 5% incremental penalty will be applied for each subsequent violation.

Banks involved in hoarding, diverting, or obstructing efficient cash distribution—including violations of the Clean Note Policy—will face appropriate sanctions.

With the holiday season approaching and expected increases in cash demand, DMBs are urged to implement robust internal controls for responsible cash distribution and to ensure accountability in mint banknote payouts at their branches.