CBN cracks down on Banks and PoS operators disrupting Naira circulation amid cash scarcity

In response to the persistent scarcity of cash causing disruptions in the circulation of the naira, the Central Bank of Nigeria (CBN) has taken a firm stance, vowing to mete out sanctions to banks and Point-of-Sale (PoS) operators found guilty of colluding to disrupt the seamless flow of the national currency. The apex bank made this commitment in a statement titled, ‘CBN Cautions Banks, PoS Operators Over Availability of the Naira,’ released on Thursday, December 21, 2023, and introduced a digital feedback box to address public complaints.

CBN’s strong warning

Expressing concern over alleged collusion between some Deposit Money Banks and PoS operators, the CBN, in a statement posted on its Twitter page, stated, “The CBN frowns at such inappropriate actions by certain individuals and is investigating the reported cases capable of undermining the smooth running of the economy. The CBN has, therefore, warned banks and PoS operators to desist from such activities as relevant sanctions shall be meted out to those found wanting.”

This stern warning from the central bank emphasizes its commitment to ensuring the stability and efficiency of the national currency, and it signals a crackdown on any activities that hinder the smooth circulation of the naira.

Investigation into collusion

The CBN has initiated an investigation into the reported cases of collusion between banks and PoS operators. The allegations suggest that such collaborations have contributed to the scarcity of cash, affecting the availability of naira notes and disrupting the seamless circulation of the currency. The outcome of this investigation is expected to shed light on the extent of the disruption and identify those responsible.

Public call to action

Simultaneously, the central bank has called on members of the public to utilize alternative payment channels and report any unauthorized activities, such as capping and hoarding, by banks or PoS agents to the CBN branch in their locations. This appeal for public participation underscores the collaborative effort required to maintain the integrity of the nation’s currency.

Government apology

In a related development, the Federal Government, through the Minister of Information and National Orientation, Mohammed Idris, issued an apology to Nigerians for the current cash crunch in the country. Minister Idris clarified that the scarcity of naira notes is not deliberate and assured the public that the CBN is actively working to address the situation.

He added, “The CBN was doing everything possible to address the situation.” This acknowledgment from the government highlights the recognition of the challenges faced by citizens and underscores the urgency with which corrective measures are being pursued.

Introducing a digital feedback system

As part of its commitment to transparency and accountability, the CBN has introduced a digital feedback box to address complaints from the public. This system aims to provide a direct channel for individuals to report instances of currency hoarding, capping, or any other unauthorized activities affecting the circulation of the naira. The implementation of this digital mechanism aligns with modern approaches to enhancing communication and resolving issues promptly.

In conclusion, the CBN’s proactive stance against disruptions in naira circulation signifies a dedication to maintaining the stability of the national currency. The investigations into collusion and the introduction of a digital feedback system demonstrate the central bank’s commitment to addressing issues promptly and transparently. As Nigerians navigate the current cash scarcity, the collaborative efforts of the public and regulatory bodies will be crucial in ensuring the resilience and effectiveness of the nation’s financial system.