By Victor Uzoho
To ease the management of large cash sums and deepen financial inclusion, the Central Bank of Nigeria (CBN) has released guidelines for the operation of the Bank Neutral Cash Hubs.
In a statement posted on its website, the apex bank said the release of the guidelines was in furtherance of its mandate to promote a sound financial system in Nigeria.
According to CBN, the guideline was part of collaborative efforts with the Banker’s Committee to reduce cost and improve operational efficiency in the country’s cash management.
“The CBN, in collaboration with the Banker’s Committee, initiated the Nigerian Cash Management System, which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain. One initiative towards the stated goal is the introduction of BNCH.
“BNCHs are cash collection centres to be established by registered processing companies or Deposit Money Banks (DMBs) based on business needs. They will be located in areas with high volumes of commercial activities and cash transactions,” CBN said.
It noted that the hubs would provide platforms for customers to make cash deposits and receive value irrespective of the bank with which their accounts are domiciled.
“This guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision.
“The key objective is to reduce the risks and costs borne by banks, merchants, and huge cash handlers in the course of cash management activities. It will also deepen financial inclusion and leverage shared services to enhance cash management efficiency.
“It can also carry out high volume cash disbursement to members of the public on behalf of financial institutions, and any other activities that may be permitted by the CBN. But it is not permitted to carry out investing or lending activities, or receive, disburse or engage in any transaction involving foreign currency,” the statement reads.
It called on eligible promoters like DMBs and Cash Processing Companies (CPCs) to apply for registration of BNCH.
“Prospective promoters of BNCH shall apply in writing to the Director, Currency Operations Department,” it added.
The CBN, in collaboration with the Banker’s Committee, initiated the Nigerian Cash Management System, which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.
