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The Central Bank of Nigeria (CBN) issued a stern warning to banks on Friday regarding the activities of their staff, which are allegedly obstructing the flow of cash in the economy.
The CBN observed that malpractices and the drive to support the profiteering motives of Point of Sale (PoS) operators, in collusion with bank staff—who often own the terminals themselves—were hampering efficient cash circulation.
This warning followed an inquiry into allegations that Automated Teller Machines (ATMs) were without cash amid claims that banks were trading cash with PoS operators.
The CBN further disclosed that it has consistently supplied cash to banks based on their withdrawal requests at any of the apex bank’s 37 locations nationwide. The central bank noted a significant increase in currency circulation between the last quarter of 2023 and the end of June 2024 as evidence of this.
The CBN acknowledged that bank officials who own PoS terminals give priority to PoS operators to support their business. Spot checks revealed that PoS operators conducting business around ATMs often take advantage of stranded customers. These operators purchase cash from high cash-generating entities, including petrol stations and supermarkets, at a premium to fund their operations, thereby disrupting the flow of cash to banks for processing and redistribution.
In response to this development, the central bank has issued circulars directing deposit money banks to immediately implement measures to address these issues.
“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.
The CBN also directed banks to activate closer monitoring of all agents attached to their institutions and ensure compliance with existing guidelines. Additionally, the CBN stated that it is reviewing the guidelines on the operations of agency banking in the country to ensure that agent banking serves rural and remote communities as intended, rather than concentrating operations in urban centers.
This is not the first time the CBN has identified cases of collusion between banks and PoS operators. In December 2023, the CBN warned Deposit Money Banks (DMBs) and PoS operators against acts undermining the availability and flow of cash across the country. The central bank also mentioned investigating reported cases capable of disrupting the smooth running of the economy.
In a statement issued by Acting Director of Corporate Communications, Mrs. Sidi-Ali Hakama, the CBN alluded to alleged cases of collusion between banks and PoS operators, which reportedly affected cash availability and disrupted the circulation of the Naira.
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