The Central Bank of Nigeria (CBN) has announced the launch of cash collection centers called Bank Neutral Cash Hubs (BNCH) to be set up by Deposit Money Banks (DMBs) or registered Cash Processing Companies (CPCs). CBN made this known in a guideline for the registration and operation of BNCHs in Nigeria. According to the CBN, BNCHs would provide an efficient platform for customers to deposit and receive cash regardless of the bank the customers’ account is domiciled, adding that BNCHs would be located in areas with a high frequency of cash transactions and business activities.
The CBN also disclosed that the minimum transaction limit for individuals and corporate entities is N500,000 and N1 million respectively.
The guideline reads, “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 handler in the course of cash management activities, deepen financial inclusion, leverage on shared services to enhance cash management efficiency.
“A BNCH may carry out the following: 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; any other activities that may be permitted by the CBN”.
BNCHs are however barred from conducting investing or money lending activities.
Furthermore, BNCHs are not permitted to receive, disburse or engage in any transaction involving foreign currency or sub-contract another entity to conduct any of its operations or participate in any other financial transaction not included in the CBN-approved guideline.
Potential promoters of BNCH should apply in writing to the Director, Currency Operations Department, and are required to pay a non-refundable fee of N600,000 for registration.
The CBN stated that BNCHs was part of its collaborative efforts with the Banker’s Committee in order to reduce cost and enhance operational efficiency in the country’s cash management value chain.
