The Central Bank of Nigeria in furtherance of its obligation to promote an efficient financial system in Nigeria has collaborated with the Banker’s Committee to initiate the Nigerian Cash Management System (NCMS), which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.
A major initiative towards the achievement of the above stated goal is the introduction of the Bank Neutral Cash Hubs (BNCH), which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.
This was released in a circular by the Central Bank of Nigeria, titled, “Guidelines for the registration & operation of Bank Neutral Cash Hubs in Nigeria”.
These 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 various strategic places with high volumes of commercial activities and cash transactions where customers will be able to make cash deposits and receive value regardless of which bank their account is domicile.
This initiative primarily aims at reducing the risks and cost borne by banks, merchants and huge cash handlers in the course of cash management activities, strengthen financial inclusion and take advantage of shared services to enhance cash management efficiency.
- The BNCHs are permitted to carry out duties such as:
The receipt of Naira denominated deposits on behalf of financial institutions from individuals and businesses.
Disbursement of high cash volume to members of the public on behalf of financial institutions, among others.
- However, the BNCHs cannot carry out duties such as:
Investing and lending activities. Also, the receipt, disbursement or engagement in any foreign currency transaction.
- The Deposit Money Banks (DMBs) and Cash Processing Companies (CPCs) are qualified to register for the BNCH.
- CBN has the right of access to the BNCH facility for the purpose of compliance monitoring of activities and examination of records/books.
- BNCH shall comply with the reporting requirements and timelines specified in the Cash Activity Reporting Portal (CARP) Industry Handbook by providing data and information.
- BNCH shall also comply with the CBN Cashless Policy, CBN Consumer Protection Regulations and other existing CBN guide on charges for banks and other financial institutions.