Nigeria’s Central Financial institution (CBN) has imposed a ₦150 million nice on deposit cash banks and monetary establishments caught promoting newly minted banknotes to forex hawkers. The small print of the nice, contained in a Friday round seen by TechCabal, come as Nigeria grapples with a protracted money scarcity that has left prospects struggling to entry money at ATMs and over-the-counter.
“The CBN has famous with dismay the prevalence of illicit stream of mint banknotes to forex hawkers and different unscrupulous financial brokers that commodify naira banknotes, thus impeding environment friendly an efficient money distribution to banks’ prospects and normal public,” mentioned the round dated December 13.
The money disaster started in late 2022 with the CBN’s controversial forex redesign coverage, geared toward curbing counterfeit forex and “decreasing money exterior of banks.” The unintended impact was a money scarcity that led to widespread frustration amongst residents who couldn’t entry money in banks and ATMs.
The scarcity continued lengthy after the forex redesign was shelved and has led to a surge in demand for money through various channels, together with POS brokers who’ve sourced banknotes from casual merchants, together with supermarkets and gasoline stations.
Past POS brokers, forex hawkers—who purchase contemporary notes from banks and resell them at a markup at events and functions-are additionally believed to have worsened the issue. One publication not too long ago reported that POS brokers have been promoting newly minted notes in busy Lagos markets, exacerbating the dire state of affairs.
In response to the brand new nice, a number of banks have already taken steps to adjust to the CBN’s directives. In accordance with sources near the matter, not less than two main business banks in Lagos stopped disbursing mint banknotes over-the-counter since Wednesday.
“Any erring deposit cash banks or monetary establishment that’s culpable of facilitating, aiding or abetting, by direct actions or inactions, illicit stream of mint banknotes to forex merchants and unscrupulous financial brokers that commodify naira banknotes shall be penalised at first occasion N150 million per erring department and at later situations apply the total weight of related provisions of BOFIA 2020,” the CBN assertion learn.
It’s unclear if fines on mint notes will remedy what is probably going a systemic drawback that has incentivised cash-heavy companies to promote their financial institution notes to POS brokers, circumventing the banks and finally decreasing the amount of money on the banks.