The Central Bank of Nigeria (CBN) at the weekend released a draft guideline for the registration and operation of Bank Neutral Cash Hubs (BNCH) which are to serve as central cash deposit points for bank customers across the country.
According to the director, currency operations department CBN, Ahmed B. Umar, the guideline defines the registration requirements and operational procedures for the bank neutral cash hub.
This, he said, was conceptualized to offer bank neutral cash withdrawal and deposit services to high volume/value cash transacting customers in a one-stop facility.
In simple terms, BNCHs will provide a platform for customers to make cash deposits and receive value irrespective of the bank with which their account is domiciled.
Specifically, the guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision. This move it said is in line with the Nigerian Cash Management System (NCMS) which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.
The guidelines explained that BNCHs which are cash collection centers are 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. The key objective of setting up Bank Neutral Cash Hubs (BNCH) is to reduce the risks and cost borne by banks, merchants and huge cash handlers in the course of cash management activities; deepen financial inclusion; and leverage on shared services to enhance cash management efficiency.”
Activities that are permissible for BNCHs under the guideline include “receipt of naira denominated deposits on behalf of financial institutions from individuals and businesses with high volumes of cash, high volume cash disbursement to members of the public on behalf of financial institutions.”
They are, however, barred from carrying out investing or lending activities. They are also not allowed to receive, disburse, or engage in any transaction involving foreign currency or sub-contract another entity to carry out its operations as well as undertake any other transaction not prescribed by the guideline.
Only deposit money banks and cash processing companies are allowed to apply for a BNCH registration and they are expected to provide a non-refundable application fee of N100,000 and a non-refundable approval fee of N500,000
