The Central Bank of Nigeria (CBN) has issued a strong warning to Deposit Money Banks (DMBs), announcing a hefty fine of N150 million per branch for facilitating the illegal flow of mint naira notes to currency hawkers. This move underscores the apex bank’s determination to combat the commodification of the naira and ensure the smooth and efficient distribution of cash to the public.
In a circular issued on Friday, December 13, 2024, and signed by Acting Director of the Currency Operations Department, Mohammed Olayemi, the CBN expressed deep concern over the increasing presence of mint naira notes being traded by hawkers on the streets. This practice, the bank emphasized, not only disrupts the proper flow of currency but also undermines the integrity of the Nigerian financial system.
This latest directive builds upon a previous circular issued on November 13, 2024, where the CBN outlined its commitment to addressing the issue of naira commodification. The bank has now taken a decisive step by imposing a significant financial penalty on any DMB found to be aiding or abetting the illegal activities of currency hawkers.
To ensure compliance, the CBN has announced the following measures:
- Intensified Spot Checks: The bank will increase the frequency of spot checks at bank branches and ATMs to monitor cash payouts and identify any irregularities.
- Mystery Shopping: The CBN will deploy “mystery shoppers” to infiltrate identified cash hawking spots across the country to gather evidence of illegal activities.
- Stricter Sanctions: Subsequent violations will attract even harsher penalties, with the CBN threatening to invoke the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The circular clearly states that any DMB found culpable of facilitating the illicit flow of mint banknotes to currency hawkers will be penalized with a fine of N150 million for the first offense.
Earlier Warnings and Measures:
The CBN has previously issued warnings to DMBs regarding cash hoarding and diversion. In the November 13, 2024, circular, the bank highlighted the importance of responsible cash distribution and warned of penalties for banks found to be seizing cash from unauthorized hawkers. These penalties include a 10% fine of the total value of cash withdrawn from the CBN on the day of the offense, with repeat offenders facing an additional 5% penalty for each subsequent breach.
The CBN’s latest actions demonstrate its unwavering commitment to maintaining the integrity of the naira and ensuring a stable and efficient financial system. By imposing significant fines and implementing robust monitoring mechanisms, the apex bank aims to deter DMBs from engaging in activities that facilitate the illegal activities of currency hawkers. These measures are crucial to curb the commodification of the naira and ensure that the public has access to clean and readily available currency.
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