Olayemi Cardoso, governor of the Central Bank of Nigeria, has directed deposit money banks (DMBs) in the country to ensure that customers get cash on demand whether across the counter or at the automated teller machine (ATM).
The directive followed the persisting challenge Nigerians have had with banks, which has seen cash rationing and empty ATMs without any justifiable reasons.
Both the banks and CBN have been passing the buck on what is responsible for the inexplicable lack of cash in banks. While the CBN has consistently maintained that its supply of cash to banks remained robust and reasonable, the banks have often blamed the apex bank for the scarcity of cash.
Since the naira redesign exercise in 2023, when the country faced acute cash scarcity, the situation has persisted raising concern about the fact that people have to buy cash with their money. While there is no cash in the banks, point of Sale, PoS, operators have enough cash.
The PoS operators have since created an alternative financial system to the banking system, which controls about N4 trillion of the N5 trillion in circulation.
However, the Central Bank of Nigeria, seems to have had enough of the situation, and has decided to wield the big stick. Henceforth, any bank that fails to make cash available to customers on demand will face serious sanction.
Mr. Cardoso said at he weekend that banks have a responsibility to meet customers' need at all times without fail. Speaking at the CIBN dinner on Friday, Cardoso warned that tough action will be taken against erring banks.
"Effective December 1, 2024, any bank that fails to provide cash to customers for any reason will face very strict sanction. We will be conducting on the spot checks of banks' ATMs to ensure that there is cash in them, and we would punish banks that fail to supply cash to them," he said.
According to Cardoso, who was the guest speaker at the CIBN (Chartered Institute of Bankers of Nigeria), annual dinner said telephone lines and email addresses will be provided to the public to report any bank that fails to pay cash on demand within the extant rules. He said such complaints by the public will be taken seriously to ensure that banks meet their statutory obligation to their customers.
The CBN governor said that the past year has been very tough and challenging, but that the reforms are proving positive with the GDP growth rate for the third quarter of 3.6 percent, which is higher than the 2.3 percent during the same period last year.
"We have experienced significant challenges in ensuring price stability, but we believe that the results are reassuring. However, in 2025, we are going to concern on inflation to make sure that it significantly tempers," he said.
Cardoso said that the bank intends to run an institution that is open, and allows for public participation, which is evident in the question and answer session after every MPC meeting.
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