The Central Bank of Nigeria (CBN) has made a bold statement by imposing a hefty ₦1.35 billion fine on nine major Deposit Money Banks (DMBs) over their failure to dispense cash through Automated Teller Machines (ATMs) during the festive period. This fine follows a string of complaints from Nigerians who were unable to access cash through ATMs during the critical Yuletide season.
The nine banks, which include some of the country’s most prominent financial institutions, have been hit with a penalty of ₦150 million each. This decision by the apex bank underscores its commitment to enforcing cash distribution guidelines and ensuring that Nigerians can access their hard-earned money during peak periods.
Failed Cash Disbursement at Critical Time
As Christmas and New Year festivities drew near, Nigerians thronged ATM machines across the country, hoping to withdraw cash for their holiday expenses. However, many were met with the frustrating sight of ATMs either being out of service or displaying “no cash available” messages. This widespread inconvenience led to an outcry from Nigerians who depend on ATMs for quick and easy access to cash.
The Central Bank of Nigeria’s spot checks on bank branches revealed that several financial institutions had failed to ensure the availability of adequate cash at their ATMs during the peak holiday period. In light of these violations, the CBN took decisive action by levying fines on the affected banks, sending a clear message to all financial institutions about the importance of adhering to cash distribution guidelines.
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 were the nine banks found to be in violation of the CBN’s regulations.
CBN’s Response to Persistent Violations
The fine, totaling ₦1.35 billion, was imposed as part of the CBN’s ongoing efforts to enforce its cash distribution policies. Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications at the CBN, confirmed the penalty, stating that it was in line with the bank’s strategy to ensure compliance with its cash circulation guidelines.
She added that the CBN would continue to monitor the situation closely, investigating any further cases of cash hoarding or rationing both within bank branches and among Point-of-Sale (POS) operators. “The CBN will not hesitate to impose further sanctions on any institution found violating its cash circulation guidelines,” Mrs. Ali stated.
The apex bank has also vowed to work in collaboration with security agencies to crack down on illegal cash sales and violations by POS operators. The CBN has set a daily cumulative withdrawal limit of ₦1.2 million for POS operators to prevent financial malpractice.
Background: CBN’s Longstanding Warnings to Banks
The CBN’s stringent stance comes after several warnings issued to financial institutions over the past year regarding the proper distribution of cash to customers. In November 2024, CBN Governor Olayemi Cardoso made it clear during his address at the Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) that banks must comply with cash circulation policies or face severe penalties.
“Our focus remains on fostering trust, ensuring stability, and guaranteeing seamless cash circulation across the financial system,” Governor Cardoso emphasized at the event. “Banks that do not comply will face the consequences, and we are prepared to take swift action.”
The Governor’s remarks were a precursor to the CBN’s enforcement measures during the festive period, reinforcing the need for a robust cash buffer that could meet the needs of the public during times of high demand.
Implications of the Sanctions
The CBN’s fine serves as a warning to other banks in the country that non-compliance with cash distribution guidelines will not be tolerated. It is a clear signal that the CBN is committed to ensuring that the banking system remains stable, particularly in times when Nigerians rely heavily on access to cash.
For the affected banks, this fine represents a significant financial burden. Each institution will have ₦150 million debited directly from its account with the CBN, a penalty that could impact their bottom lines. While the banks have not publicly commented on the fines, it is expected that they will take immediate steps to improve their ATM cash availability in the future to avoid further sanctions.
The CBN’s actions also highlight the growing importance of the central bank’s role in regulating the banking sector and ensuring that banks uphold their responsibilities to the public. The imposition of fines is part of a broader effort to maintain financial discipline and protect customers from the inconvenience and frustration of being unable to access their own money.
Public Reaction and Future Outlook
The imposition of fines has been met with mixed reactions from Nigerians. While many have praised the CBN for taking a firm stance, others have raised concerns about whether the sanctions will have a lasting impact on improving cash availability at ATMs. Some Nigerians have called for greater transparency from banks regarding their cash replenishment processes, as well as a more efficient system for ensuring ATMs are stocked in high-demand areas.
The future of cash circulation in Nigeria remains uncertain, with some questioning whether the country is ready to transition to a cashless society. While the CBN has worked to promote digital banking and mobile payments, the reality remains that many Nigerians still rely on physical cash for their daily transactions.
The CBN has assured the public that it will continue to monitor the situation closely and enforce its policies to ensure that the banking system meets the needs of the people, especially during critical periods like the holiday season.
