At the backdrop of increasing professionalization of cash management services in the Nigerian financial sector, a leading operator in the cash services sub-sector has called for the enforcement of the regulatory provisions to enable growth and efficiency.
Speaking on the developments in the sub-sector, the Executive Chairman of Integrated Cash Management Services Limited, ICMS, Mr Charles Nwodo, frowned at a situation where several banks flout the directives of the Central Bank of Nigeria, CBN, in respect of cash management services, a situation which he said posed threat to survival of the sub-sector.
He stated: ‘‘By licensing ICMS and the other operators the CBN has a responsibility to engender a conducive operating environment for the licensees to avoid the past trends where operators in this sector folded up due to poor operating environment and hostile regulatory disposition.
‘‘For example, the CBN has rolled out policies and operating guidelines that expressly disallow banks from distributing and processing their own cash or they should apply to be licensed as such if they wish to operate these services.
‘‘But, the CBN has not been able or willing to enforce this policy as we still have several banks distributing cash with poorly equipped vehicles and processing their own cash. This is one of the challenges we are having to contend with as an industry.
‘‘Today, part of the challenges we face is persuading the CBN to enforce its own guidelines. What that has done is that it has created a situation where certain practices that are against official policies and guidelines and even our country’s laws are continuing unchecked.
‘‘Now, there is a CBN policy that prohibits banks from issuing notes that have not been processed. The reason is because if they are not processed, the state of the notes cannot be determined. If they are not processed, you don’t even know whether they are counterfeits. If they are not processed, they continue to be recycled with the implication of rapidly polluting the rest of the notes that are fit for circulation.’’
In addition to the need to streamline the industry practices along the regulatory provisions, Nwodo also indicated that such streamlining would engender cost efficient services delivery along the sector value chain.
He explained, ‘‘The central element of our value proposition is the inherent principle in shared services. This means that if I use the same resources or platform to service multiple clients efficiently, each of the clients spends less and I grow in scale and improve in efficiency continuously.
‘‘This model is simple, trusted and validated by the success of several companies and industries in many parts of the world.’’
