How CBN Tackled Year-end Cash Scarcity with Reforms, Regulation

The Central Bank of Nigeria (CBN) is reinforcing operational discipline ensuring that the financial system serves all Nigerians reliably by making cash available at all times. A committee set up and chaired by CBN Governor, Olayemi Cardoso to take a holistic look at the cash scarcity problem seems to have brought about relief to millions of Nigerians in need of cash for their daily spending and business operations. Nigerians are now excited that for the first time in recent years, Christmas season, was celebrated with zero complaints from the banking public on cash scarcity or difficulty of getting cash from banks and Automated Teller Machines (ATMs).Precious Ugwuzor reports

For years, Christmas and New Year periods were always disrupted by perennial scarcity of naira notes.

During such periods, and sometime afterwards, Nigerians find it very difficult to access cash from banks, Automated Teller Machines (ATMs), and sometimes Point of Sale (PoS) terminals.

But all that have changed after a committee set up and chaired by CBN Governor, Olayemi Cardoso reviewed cash scarcity problem in the country, and provided solution for the ease the problems of the people.

In many of the markets visited in Lagos, Abuja, Kano, Calabar, and across major cities in the country, traders praised the CBN finding lasting solutions to the problem.

A check in many of the commercial banks’ branches showed that many customers that needed cash for the season were able to get the cash over-the-counter.

Also, many bank ATMs were loaded, giving cardholders opportunity to make cash withdrawal across-the-counter and ATMs.

In many of the banks’ branches in Ibeju-Lekki, Victoria Island, Ikoyi, the long queues peculiar with the season were non-existent.

One of the banks’ customers, Mrs. Nkiru Onyema, said she spent just 10 minutes in a new generation bank to be paid N20,000 across-the-counter. “It took me 10 minutes to be paid by my bank. I am happy that the old practice of people queuing in banks and ATMs for cash withdrawals and deposits is over,” she said.

According to her, the cash crunch has eased after banks began loading their ATMs with cash to enable customers who cannot make it to the banking hall to get cash from the machine.

Another customer, Stephen Abiodun, said he was also able to make cash withdrawal from a bank’s branch ATM without any challenges.

“After spending just 15 minutes,  I was able to get cash from my bank’s ATM. The time people spent at the banking halls also reduced giving them more time to carry out other productive activities,” he said.

In many of the banks’ branches visited, in Garki Abuja, Broad street Lagos, and Ikeja-axis also in Lagos, their ATMs are fully operational.

President, Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, said the development provides a great sense of relief to bank customers.

Ogubunka, who was former Registrar, Chartered Institute of bankers of Nigeria (CIBN), said banks should make request for cash from the CBN to enable them meet their obligations to customers.

Speaking on the development during the last banker’s dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, CBN Governor, Olayemi Cardoso explained how the apex bank, working in collaboration with the commercial banks, achieved the feat.

“Our starting point was a comprehensive, end‑to‑end review of the entire cash lifecycle: from production, to transportation, to distribution, and eventual access by consumers,” he said.

The apex bank boss added: “This holistic assessment enabled us to address root causes rather than symptoms. As a result, we recalibrated our cash‑printing models, issued guidelines on the optimal ATM‑to‑card ratio, strengthened requirements for CBN approval before ATM or branch closures, enforced sanctions on banks whose ATMs fail to dispense cash, and intensified supervision of payment agents and POS operators nationwide”.

Digital finance transformation

Nigeria’s digital‑finance transformation accelerated in 2025, reflecting CBN’s twin priorities of fostering innovation while safeguarding stability across the payments ecosystem. Earlier this year, we extended our Payment System Vision roadmap to 2028, an ambitious commitment to modernise payments infrastructure and strengthen cybersecurity.

According to the CBN, more than 12 million contactless payment cards are now in circulation. Our regulatory sandbox has expanded to over 40 fintech innovators, enabling safe experimentation and responsible scaling of new digital‑finance solutions.

“Revised agent‑banking guidelines have tightened anti‑money‑laundering controls, including geo‑fencing of high‑risk areas, while improving consumer protection at the last mile. Integration across switching companies has improved, bringing Nigeria closer to seamless domestic interoperability,” it said.

Supported by these measures, Nigeria today stands among Africa’s most advanced digital payments markets, with a dynamic fintech ecosystem that has produced eight of the continent’s nine unicorns. By mid-2025, leading fintech apps had surpassed 10 million downloads each, with one surpassing 50 million downloads, reflecting deep consumer adoption.

CBN recently directed banks and other financial institutions to ensure uninterrupted use of foreign-issued payment cards across ATMs, point-of-sale (POS) terminals and online platforms nationwide.

In a circular CBN’s Financial Policy and Regulation Department and signed by its Director, Rita Sike, is expected to improve access to funds, security and user experience for tourists and Nigerians returning from the diaspora.

She said: “In furtherance of ongoing efforts to facilitate access to funds and convenience, security, and user experience in foreign card usage for diasporans and tourists visiting Nigeria, all banks and non-bank acquirers of value are hereby directed to ensure uninterrupted and efficient local currency withdrawal, payment, and transfer services for users of foreign-issued payment cards nationwide”.

Under the circular, banks and fintechs were instructed to ensure that all ATMs, POS and virtual terminals were configured to accept international cards, complied with card-scheme standards and possessed the required certifications.

They were also required to maintain system availability to avoid failed transactions.

The central bank said institutions must “implement multi-factor authentication for all withdrawals and online transactions exceeding $200 per day, $500 per week, and $1,000 per month (or its equivalent),” while ensuring compliance with approved ATM cash withdrawal limits.

The CBN further directed banks and acquirers to clearly disclose exchange rates and charges to customers before completing transactions, maintain sufficient liquidity to settle transactions, and ensure that merchants were paid in local currency.

They are expected to “clearly communicate the applicable exchange rate, which shall be market-driven and based on the prevailing official rate, as well as other associated charges to users,” the CBN said, adding that transactions should only be completed after customers have accepted the terms.

To curb fraud and abuse, the circular required institutions to strengthen know-your-customer and anti-money laundering controls, monitor unusual transaction patterns, recalibrate fraud-monitoring systems to reduce false declines on legitimate foreign card transactions, and ensure that card-acceptance devices supported contactless payments for low-value transactions.

Banks were also directed to require signed receipts for card-present transactions and request valid identity documents where transactions appeared suspicious.

Suspicious transactions must be reported to the Nigerian Financial Intelligence Unit in line with existing regulations.

For acquirers, the CBN mandated robust and auditable chargeback management processes, retention of transaction records for at least 12 months, and quarterly training for merchants and agent networks on dispute handling and chargebacks.

The regulator warned that unresolved customer complaints escalated to the CBN would attract sanctions.

Tourists and Nigerians returning from the diaspora who experienced difficulties using foreign cards were advised to report such incidents to the CBN’s Consumer Protection and Financial Inclusion Department. “The CBN will monitor compliance with this directive and will impose appropriate sanctions on any institution found in breach, in accordance with extant regulations,” it said.

The move comes during the yuletide period, when a surge in visits by Nigerians living abroad and foreign tourists typically leads to increased reliance on foreign-issued cards for cash withdrawals and payments.

Entrenching digital payments

The apex bank has for years, looked beyond cash by entrenching digital payments among the populace.

That explained why the CBN raised the innovation bar with the release of a new e-payment guidelines titled: “Migration to ISO 20022 Standard for Payment Messaging and Mandatory Geo-Tagging of Payment Terminals”.

The new policy aligns with CBN’s move to entrench transparency, compliance and secured e-payment space.

According to Cardoso, the Nigerian payments ecosystem has been ahead of many advanced economies, yet has not always received the recognition it deserves.

“Many innovations that other countries are only now experiencing have been part of our system for years. We must celebrate these successes, as they contribute to building our global reputation. Nigeria’s dynamic fintech ecosystem has driven financial inclusion and positioned the country as a hub of innovation in Africa,” he said.

Cardoso explained that despite a challenging external environment, Nigerian Fintechs continue to shine, attracting significant foreign investment and several have achieved global unicorn status this year. Their innovations, alongside other financial service providers, have fueled growth in transactions and made financial services more affordable and accessible for many more Nigerians.

“We must continue to leverage this channel to enhance access to finance and credit, particularly for under-served populations. However, I urge fintech companies and banks to ensure their platforms are not exploited for fraudulent activities. Strengthening the KYC onboarding process is essential to prevent malicious actors from exploiting our financial system”.

“Additionally, these institutions must prioritize improving transaction monitoring and bolstering consumer protection measures to ensure that digital channels remain safe, especially for the most vulnerable segments of our population”.

Cardoso said that while the apex bank continues to lay the foundation for price stability and foster a conducive policy environment, the role of banks in this journey remains crucial.

“At the Central Bank, we have intensified surveillance of market activities to ensure compliance. Together, we must build a market based on strong governance and transparency. As regulators, we will maintain a zero-tolerance approach to compliance violations,” he said.

Sanctions for policy violations

The CBN recently sanctioned Deposit Money Banks (DMBs) for failing to make naira notes available through automated teller machines (ATMs), during the yuletide season.

Each bank was fined N150 million for non-compliance, in line with the CBN’s cash distribution guidelines, following spot checks on their branches. The enforcement action follows repeated warnings from the CBN to financial institutions to guarantee seamless cash availability, particularly during periods of high demand.

Communication with the banks revealed that the fines were debited directly from their accounts with the apex bank.Hakama Sidi Ali, acting director of corporate communications at the CBN, confirmed the development, noting that “Ensuring seamless cash flow is paramount to maintaining public trust and economic stability.

“The CBN will not hesitate to impose further sanctions on any institution found violating its cash circulation guidelines,” she added.The CBN’s investigations and monitoring will continue to scrutinise cash hoarding and rationing, both at bank branches and by POS operators. The Central Bank is working with security agencies to crack down on illegal cash sales and operational violations, including enforcing POS operators’ daily cumulative withdrawal limit of N1.2 million.

Cardoso had warned banks to strictly adhere to cash distribution policies or face severe penalties. He underscored the CBN’s commitment to maintaining a robust cash buffer to meet Nigerians’ needs. “Our focus remains on fostering trust, ensuring stability, and guaranteeing seamless cash circulation across the financial system,” Cardoso said.