The Central Bank of Nigeria (CBN) has released guidelines for the operation of the Bank Neutral Cash Hubs (BNCH) in furtherance of its regulatory efforts to ease huge cash management, deepen financial inclusion and promote a sound financial system in the country.
In a statement on its website, the apex bank disclosed that the release of the guidelines was part of its collaborative efforts with the Banker’s Committee to reduce cost and improve operational efficiency in the country’s cash management.
The CBN stated: “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 alue chain.
“One initiative towards the stated goal is the introduction of BNCH.
“BNCHs are cash collection centers 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,” it added.
Further justifying the introduction of the guidelines, the apex bank stated 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 is even as it pointed out that the guidelines aimed at providing minimum standards and requirements for BNCH registration and operations for effective supervision.
According to the CBN, “the key objective is to reduce the risks and cost borne by banks, merchants, and huge cash handlers in the course of cash management activities.
“It will also deepen financial inclusion and leverage on shared services to enhance cash management efficiency,” it added.
Based on the regulatory guidelines, a BNCH is permitted to carry out activities like receipt of Naira denominated deposits on behalf of financial institutions from individuals and businesses with high volumes of cash.
Also, 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.
However, the apex bank stressed that a BNCH was not permitted to carry out investing or lending activities, or receive, disburse, or engage in any transaction involving foreign currency.
It advised eligible promoters like DMBs and Cash Processing Companies (CPCs) to apply in writing for registration of BNCH to the CBN’s Director, Currency Operations Department.
