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Financial Inclusion: CBN issues guidelines for Bank Neutral Cash Hubs’ operations

Mr. Godwin Emefiele, Governor of CBN

*The Central Bank of Nigeria explains the framework for the operation of Bank Neutral Cash Hubs is part of its collaborative efforts with the Banker’s Committee to reduce costs, associated risks, and improve operational efficiency in cash management

Isola Moses | ConsumerConnect

As a measure towards improving huge cash management and deepening financial inclusion in the country’s economy, the Central Bank of Nigeria (CBN) has released guidelines for the operation of the Bank Neutral Cash Hubs (BNCH).

ConsumerConnect reports the CBN, which said this via a statement on the Bankers’ Bank corporate Web site, noted that the release of the guidelines is in furtherance of its mandate to promote a sound financial system in Nigeria.

The Bank also disclosed that the measure is part of its collaborative efforts with the Banker’s Committee to reduce cost and improve operational efficiency in the country’s cash management.

It also noted: “The CBN, in collaboration with the Banker’s Committee, initiated the Nigerian Cash Management System which seeks to reduce cost and improve operational efficiency in the country’s cash management value chain.

“One initiative towards the stated goal is the introduction of BNCH.”

The CBN said: “BNCHs are cash collection centres 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.”

According to apex bank, the hubs will provide platforms for consumers to make cash deposits and receive value irrespective of the bank with which their accounts are domiciled.

The CBN further stated: “This guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision.

“The key objective is to reduce the risks and cost borne by banks, merchants and huge cash handlers in the course of cash management activities.

“It will also deepen financial inclusion and leverage on shared services to enhance cash management efficiency.”

According to the guidelines, a BNCH is permitted to carry out activities like receipt of Naira denominated deposits on behalf of financial institutions from individuals and businesses with high volumes of cash.

It stated: “It can also carry out 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.

“But it is not permitted to carry out investing or lending activities, or receive, disburse, or engage in any transaction involving foreign currency.”

The Bank, therefore, urged eligible promoters, such as Deposit Money Banks (DMBs) and Cash Processing Companies (CPCs) to apply for registration of BNCH.

It added: “Prospective promoters of BNCH shall apply in writing to the Director, Currency Operations Department.”

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