CBN Launches Crackdown on Banks Hoarding Cash as Nigerians Endure Persistent Shortages

The Central Bank of Nigeria (CBN) has announced immediate nationwide spot checks on bank branches to enforce cash distribution directives as Nigerians continue to grapple with a prolonged cash crunch. This move, disclosed by CBN Governor Olayemi Cardoso at the 2024 Annual Bankers Dinner in Lagos, follows mounting reports of limited cash availability at banks and ATMs across the country......Read The Full Article>>.....Read The Full Article>>

Cardoso urged customers experiencing difficulties withdrawing cash to report directly to the apex bank via designated phone lines and email addresses, as part of efforts to resolve the crisis.

On-the-Spot Inspections to Enforce Compliance

Starting December 1, 2024, CBN officials will make unannounced visits to bank branches to ensure compliance with cash-release directives. A senior official confirmed that the checks aim to address hoarding and other practices exacerbating the crisis.

“Any bank found hoarding cash will be severely sanctioned,” the official said. “These inspections will intensify in the coming days and weeks to mitigate the current cash crunch that is crippling banking transactions.”

Banks have been directed to release all available cash to customers, but inconsistencies in cash disbursement continue to plague the financial system.

Ongoing Challenges Across States Abuja

In the capital, banks restrict over-the-counter withdrawals to ₦20,000 per customer, while ATMs dispense a maximum of ₦50,000 for account holders using the bank’s cards. Customers using other banks’ cards face stricter limits. Meanwhile, Point of Sale (PoS) operators have seemingly unlimited access to cash, exploiting the situation by charging exorbitant fees.

At Gosa Market along Airport Road, PoS operators now charge as much as ₦2,000 to withdraw ₦50,000. Bank officials blame the CBN, alleging inadequate cash allocations to branches, a claim the apex bank refutes.

Katsina

Residents in Katsina face severe cash shortages, with some banks limiting withdrawals to as low as ₦10,000. PoS operators struggle to access cash, further complicating transactions.

“My own bank has for the past four months failed to dispense cash to its customers,” said a PoS operator, Alhaji Abubakar Kaikai. “CBN must increase allocations to commercial banks and sanction those that fail to withdraw cash from the apex bank regularly.”

Abia and Benue

Bank customers in Abia State reported withdrawal caps of ₦10,000 to ₦40,000 at ATMs, with similar constraints in over-the-counter transactions. In Benue, ATMs in Makurdi and neighboring areas have rationed withdrawals between ₦20,000 and ₦50,000, forcing customers to endure long queues and delays.

Kano, Enugu, and Kwara

The situation appears better in Kano, where customers face minimal restrictions at ATMs and banking halls. Residents in Enugu have also noticed an improvement, with ATMs dispensing up to ₦10,000 per transaction. However, in Kwara, daily withdrawal ceilings vary between ₦20,000 and ₦40,000, depending on the bank.

Anambra

Tensions between banks and PoS operators are high in Anambra, with each side blaming the other for exacerbating the crisis. Banks accuse PoS operators of depleting ATMs, while operators allege that bank officials demand bribes to release sufficient cash.

Impact on Nigerians and Festive Season Concerns

With the Christmas and New Year festivities approaching, many Nigerians are concerned about the increased demand for cash. The cash crunch has disrupted businesses, hindered transportation, and forced customers to pay exorbitant fees to PoS operators.

In Enugu, one customer expressed relief after successfully withdrawing cash from an ATM: “I had to pay ₦400 just to withdraw ₦5,000 from a PoS operator last week. It’s encouraging to see ATMs dispensing cash again.”

CBN’s Warning and Outlook

The CBN has warned that banks failing to comply with cash disbursement policies will face severe penalties. The apex bank maintains that it has been fulfilling cash requests from commercial banks, contrary to claims of inadequate allocations.

As inspections intensify, Nigerians hope the measures will alleviate the cash crunch and restore normalcy to banking operations, especially during the festive season when cash demand is traditionally high.