CBN Releases Guidelines For Registration, Operation Of Bank Neutral Cash Hubs

The Central Bank of Nigeria (CBN), in furtherance of its mandate to promote a sound financial system in Nigeria has unveiled new guidelines for the registration and operationalisation of bank Neutral Cash Hubs in Nigeria.

The CBN in collaboration with Banker’s Committee had initiated the Nigerian Cash Management System (NCMS) which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.

One initiative towards the above stated goal is the introduction of Bank Neutral Cash

Hubs (BNCH). Bank Neutral Cash Hubs (BNCHs) are cash collection centers to be established by registered (licensed) processing companies or Deposit Money Banks (DMBs) based on business needs. They designed to be located in areas with high volumes of commercial activities and cash transactions. 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.

This guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision.

The apex bank stated in a circular that was issued yesterday said the setting up of Bank Neutral Cash Hubs is to reduce the risks and cost borne by banks, merchants and huge cash handlers in the course of cash management activities; deepen financial incorporation.

The new guidelines stipulated eligibility to include application for registration of a BNCH: deposit money banks and cash processing companies.

Requirements for approval-In-principle prospective promoters of BNCH (CPC or DMB) seeking to operate a BNCH shall apply in writing to the Director, currency operations department and submit the following documents with the application: a valid DMB license or a valid proof of CPC registration issued by the CBN; anon-refundable application fee of N100,000 or such other amount, which it stated that the CBN may specify.

In a bank draft payable to the CBN, the apex said an evidence of board resolution approving the application duly signed by the chairman and Secretary of the board of the CPC or the DMB; detailed business plan or feasibility report which shall, at a minimum.

The minimum includes: objectives of the BNCH; services to be rendered by the BNCH and justification for the application, amongst others.

The role of the  of BNCHs include: provision of all the requirements listed above for the operation of the BNCH; ensuring that only registered Cash-In-Transit (CIT) companies are engaged for cash movements to and from the BNCH site; proper record keeping, evacuation, accounting and reconciliation process shall be maintained;  adequate employment policy (casual staff shall not be engaged).

Background checks by security agencies and biometrics data capture shall be carried out on all employees.