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NigeriaDecides2023

CBN introduces cash collection centers, fixes deposit, withdrawal limit

The Central Bank of Nigeria (CBN) on Monday introduced cash collection centres known as Bank Neutral Cash Hubs (BNCH), to be established by registered processing companies or Deposit Money Banks (DMBs) based on business needs.

The hubs will provide a platform for customers to make cash deposits and receive value irrespective of the bank with which their account is domiciled. 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.

This was stated in the guidelines for the registration and operation of Bank Neutral Cash Hubs in Nigeria, released on Monday.

The financial requirements for an approval to operate as BNCH, which may be amended by the CBN as it deems necessary, are as follows: Non-refundable application fee of N100,000 and Non-refundable approval fee of N500,000.

Service charges, fees and commissions shall be subject to CBN’s regulatory approval, the guidelines stated.

On deposit and withdrawal limit at cash hub facility, the guidelines allows a minimum transaction value of N500,000 for individuals and minimum transaction value of N1,000,000 for corporate entities.

Eligible promoters of the cash collection centers are Deposit Money Banks (DMBs) and Cash Processing Companies (CPCs).

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They are permitted to carry out the following activities, 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 and any other activities that may be permitted by the CBN.

Non Permissible activities include, Carrying out investing or lending activities, receive, disburse, or engage in any transaction involving foreign currency, undertake any other transaction which is not prescribed by the guideline, Sub-contract another entity to carry out its operations, and any other activities that may be prohibited by the CBN.

The CBN in furtherance of its mandate to promote a sound financial system in Nigeria, in collaboration with Banker’s Committee initiated the Nigerian Cash Management System (NCMS) which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.

According to the guidelines, Prospective promoters of BNCH (CPC or DMB) seeking to operate a BNCH shall apply in writing to the Director, Currency Operations Department (COD) and submit the following documents with the application: a valid DMB license or a valid proof of CPC registration issued by the CBN, a non-refundable application fee of N100,000 only, or such other amount as the CBN may specify, in a bank draft payable to the CBN, and evidence of board resolution approving the application duly signed by the Chairman and Secretary of the board of the CPC or the DMB.

Other requirements include detailed business plan or feasibility report which shall, at a minimum, include: objectives of the BNCH, services to be rendered by the BNCH, justification for the application, organizational structure, showing functional units, responsibilities, reporting relationships, list of proposed staff in charge of BNCH operations/services, technical Services agreement (where applicable); and Certificate of Incorporation and certified true copies of other incorporation documents of the CPC or the DMB.