The Central Bank of Nigeria (CBN) on Friday issued a stern warning to banks regarding the activities of their staff that allegedly hinder the flow of cash within the economy. This move comes after reports suggested that some bank employees were collaborating with Point of Sale (PoS) operators to manipulate cash circulation.
According to the CBN, malpractices driven by the profit motives of PoS operators, often in collusion with bank staff—who in many cases are also the owners of these PoS terminals—have disrupted the efficient distribution of cash. This announcement followed an inquiry by THISDAY into allegations that Automated Teller Machines (ATMs) had been left without cash, amid claims that banks were selling cash to PoS operators.
The CBN emphasized that it has consistently supplied cash to banks based on their withdrawal requests at any of the apex bank’s 37 locations nationwide. This consistent supply was reflected in the significant increase in currency-in-circulation between the last quarter of 2023 and the end of June 2024.
The central bank acknowledged that some bank officials who own PoS terminals have been prioritizing these operators to support their businesses. Spot checks revealed that PoS operators near ATMs often exploit stranded customers by cornering or purchasing cash from high cash-generating entities, such as petrol stations and supermarkets, at a premium. This practice disrupts the flow of cash back to banks for processing and redistribution.
In response, the CBN announced that it had issued circulars directing deposit money banks to implement appropriate measures to address these issues. The CBN warned that it would impose strict sanctions on institutions that fail to comply with its regulations or whose officials are found guilty of sabotaging the system.
“CBN will not hesitate to apply dissuasive sanctions on erring institutions for failure to comply with any of its regulations or where any of its officials are found guilty of sabotaging the system,” the central bank told THISDAY.
Furthermore, the CBN instructed banks to closely monitor all agents associated with their institutions to ensure compliance with existing guidelines. The central bank also revealed that it is currently reviewing the guidelines on the operations of agency banking in the country. This review aims to ensure that agent banking operations focus on rural and remote communities to serve the unbanked population, as originally intended, rather than concentrating operations in urban centers.
This is not the first time the CBN has identified collusion between banks and PoS operators. In December 2023, the CBN warned Deposit Money Banks (DMBs) and PoS operators against actions that undermine cash availability and circulation across the country. At that time, the CBN stated it was investigating reports of collusion affecting cash availability and disrupting the circulation of the Naira.
The CBN’s ongoing efforts to address these issues underscore its commitment to maintaining the integrity and efficiency of Nigeria’s cash circulation system, ensuring that all citizens have equitable access to cash services.