Nigeria’s Central Bank will penalise commercial banks that fail to provide cash to customers at their automated teller machines (ATMs) and branches, as the country faces a prolonged cash crunch.
“We are conducting spot checks across deposit money banks, DMBs, and will impose penalties on institutions effective December 1, 2024,” CBN governor Olayemi Cardoso said at the annual bankers’ dinner in Lagos on Friday.
Cardoso urged customers to report difficulties withdrawing cash from bank branches, and ATMs directly to the CBN through designated channels, adding the guidelines would be distributed widely to raise public awareness.
“We also urge full regulatory compliance by all stakeholders, including mobile money operators and agents to promote digital transaction channels and improve service delivery,” Cardoso said. “Financial institutions found engaging in malpractices or deliberate sabotage will face stringent penalties.”
Nigerians have faced a cash squeeze since 2023 after a controversial currency change. While the failed naira redesign project led to a boon in digital payments with winners like Opay and Palmpay, it created a cash shortage at ATMs and banking halls. A central bank policy capping weekly over-the-counter withdrawals at ₦500,000 also contributed to the cash shortage.
However, the cash scarcity at commercial banks drove businesses to POS agents, who source cash from supermarkets, market people, and fuel stations. The growing reliance on POS agents has increased calls to regulate the agency banking business. In May 2024, the government ordered the country’s 1.9 million POS operators to register with the Corporate Affairs Commission (CAC).
While the CBN has tried to wean Nigerians off their cash dependence to achieve a “cashless economy,” the governor said the regulator will provide adequate cash supply.
“The CBN will continue to maintain a robust cash buffer to meet the country’s needs, particularly during high-demand periods such as the festive season and year-end,” Cardoso said. “Our focus is ensuring a seamless cash flow for Nigerians while fostering trust and stability in the financial system.”
