Cbn To Penalise Nigerian Banks For Cash Shortage From December 1

Starting December 1, 2024, Nigeria's Central Bank CBN will impose penalties on commercial banks that fail to provide cash to customers at ATMs or bank branches, amid the ongoing cash crunch in the country. CBN Governor Olayemi Cardoso announced this decision at the annual bankers' dinner in Lagos on Friday, highlighting that spot checks will be conducted on deposit money banks DMBs to enforce the policy. Cardoso also encouraged customers to report any difficulties withdrawing cash directly to the CBN through designated channels.

The cash shortage in Nigeria has persisted since 2023, following a controversial currency redesign, which, despite boosting digital payments benefiting companies like Opay and Palmpay, caused a shortage of cash at ATMs and bank branches. Further restrictions, such as a ?500,000 weekly limit on over-the-counter withdrawals, also worsened the situation. In response, many Nigerians turned to POS point-of-sale agents, who source cash from supermarkets, market vendors, and fuel stations, sparking increased calls to regulate this sector.

In May 2024, the government mandated that the countrys 1.9 million POS operators must register with the Corporate Affairs Commission CAC. Although the CBN aims to promote a cashless economy, Governor Cardoso emphasized that the CBN will ensure an adequate supply of cash, especially during high-demand periods like the festive season. The Central Bank's focus is on maintaining trust and stability in the financial system while ensuring seamless cash flow for Nigerians.