In a significant move to alleviate the ongoing cash crunch in Nigeria, the Central Bank of Nigeria (CBN) has announced that it will penalize commercial banks that fail to supply cash at their automated teller machines (ATMs) and branch locations. This decision comes as the country grapples with a prolonged shortage of physical currency.
CBN Governor Olayemi Cardoso revealed during the annual bankers’ dinner in Lagos that the bank is implementing spot checks across deposit money banks (DMBs). Effective December 1, 2024, institutions that do not comply with cash availability standards will face penalties. Cardoso also encouraged customers to report any difficulties in withdrawing cash directly to the CBN through designated channels. To ensure public awareness, CBN will distribute guidelines widely.
Cardoso emphasized the importance of regulatory compliance among all stakeholders, including mobile money operators and agents, to promote digital transaction channels and enhance service delivery. He warned that financial institutions engaged in malpractices or deliberate sabotage would face strict penalties.
Since a controversial currency redesign in 2023, Nigerians have experienced a significant cash squeeze. Although the failed naira redesign led to a surge in digital payment platforms like Opay and Palmpay, it also resulted in severe cash shortages at ATMs and bank branches. A CBN policy limiting weekly over-the-counter withdrawals to ₦500,000 further exacerbated the situation.
This scarcity has driven many businesses to rely on Point of Sale (POS) agents, who source cash from supermarkets, markets, and fuel stations. The increasing dependence on these agents has sparked calls for regulation in the agency banking sector. In May 2024, the government mandated that the country’s 1.9 million POS operators register with the Corporate Affairs Commission (CAC).
While the CBN aims to transition Nigerians toward a “cashless economy,” Governor Cardoso reassured the public that the bank would ensure an adequate cash supply. “The CBN will maintain a robust cash buffer to meet the country’s needs, especially during peak demand periods like the festive season,” he stated. “Our priority is to ensure a seamless cash flow for Nigerians while fostering trust and stability in the financial system.”
As the Central Bank of Nigeria takes these steps, it remains to be seen how effectively they will alleviate the cash shortage and enhance the overall banking experience for Nigerians.
