Cash Hoarding: CBN Sanctions Await Banks , Plans N1.4 trillion for Circulation

The Central Bank of Nigeria (CBN) has announced its resolve to launch sanctions on banks that fail to dispense cash through their automated teller machine (ATMs)

This represents part of the apex bank’s efforts to ensure sufficient cash in circulation.

CBN Governor, Yemi Cardoso, made this known during a press briefing at the end of the 297th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.

The governor noted that all deposit money banks must always ensure enough cash is available for immediate withdrawals.

While revealing that a mechanism has been completed to monitor compliance, the governor stressed that any banks that default will be heavily sanctioned.

Cardoso said, “We ourselves, have devised a monitoring system, a spot-checking system, whereby we will go to the banks and just ensure that these things are done in the way and manner in which they are meant to be done.

“And if they are not, again, there will be sanctions but I believe that at the stage we are in now, everybody realises that stakeholders play their part in ensuring that cash gets to the desired places they are intended to be.”

The governor further revealed that the apex bank will release an additional N1.4 trillion into circulation over the next three months for improved cash flow within the banking system.

“Another N1.4 trillion is likely to be delivered in another three months to aid that whole process of cash within the system and cash velocity.

He added, “So, from our perspective, we are doing everything possible to ensure that there is sufficient cash in the system. There is no excuse for not having sufficient cash in the system.

“Now it goes to the deployment of that cash and quite frankly, we are working very, very closely, we are engaging with all the deposit money banks to ensure that they are putting these things through their ATMs, effectively dispensing cash to those that are in need.”

Recall that in July this year, the amount of currency outside the banking system in Nigeria decreased to N3.66 trillion.

This indicates a reduction of 3.32% (N130 billion) from the previous month’s figure of N3.79 trillion, stressing the effort of the apex bank to tighten liquidity and encourage deposits into the formal banking sector.

Therefore, it is logical that the efforts to inject more cash into the formal banking system become necessary.

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