CBN Imposes N150 Million Fine on Banks for Illegal Mint Naira Notes Distribution

The Central Bank of Nigeria (CBN) has announced a fine of N150 million on Deposit Money Banks found guilty of facilitating the illegal distribution of mint naira notes to currency hawkers nationwide. This decision follows recent concerns regarding misinformation about the validity of old N1000, N500, and N200 banknotes, which remain legal tender according to a Supreme Court ruling issued on November 29, 2023.

In a statement signed by Sidi Ali Hakama, acting director of corporate communications, the CBN reaffirmed the legal status of these denominations and cautioned against hoarding. The apex bank expressed its alarm over the increasing trade of mint naira notes by hawkers, describing this practice as detrimental to efficient cash distribution to the public.

In a circular dated Friday and signed by Mohammed Olayemi, Acting Director of the Currency Operations Department, the CBN reiterated its commitment to combatting the commodification of the naira. According to the directive, any financial institution found culpable will incur a penalty of N150 million for the first violation, with stricter sanctions for subsequent infractions as outlined in the Banks and Other Financial Institutions Act (BOFIA) 2020.

To ensure compliance, the CBN plans to enhance its monitoring efforts through periodic spot checks in banking halls and ATMs, along with deploying mystery shoppers to uncover areas where illicit cash hawking occurs.

The circular stated:

> “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.”

The CBN has urged Deposit Money Banks to strengthen their controls and procedures to prevent exploitation of their systems for illegal transactions.