To improve cash management efficiency, the CBN has introduced Bank Neutral Cash Hubs

To improve cash management efficiency, the CBN has introduced Bank Neutral Cash Hubs

The Central Bank of Nigeria (CBN), in partnership with the Bankers' Committee, has established Bank Neutral cash hubs, which are cash collection centers. This will allow it to lower costs and increase operational efficiency in the cash management value chain in the country.

According to a circular issued recently titled "Guidelines for the registration and operation of Bank Neutral Cash Hubs (BNCH) in Nigeria," this is the case.

BNCHs (Bank Neutral Cash Hubs) are cash collection centers that are established in response to business needs by registered processing firms or Deposit Money Banks (DMBs).

They'll be in areas with a lot of commercial activity and financial activities. Customers will be able to deposit cash and receive money at the hubs regardless of which bank they have an account with.

The purpose of this guideline is to provide minimum standards and regulations for BNCH registration and activities to ensure effective oversight.

The BNCH is unable to engage in investment or lending activities. Furthermore, BNCH is prohibited from receiving, disbursing, or engaging in any transaction involving foreign currency.

The BNCH is open to both Deposit Money Banks (DMBs) and Cash Processing Companies (CPCs).

The CBN has access to the BNCH facility for activity compliance monitoring and record/book examination.

By supplying data and information, BNCH will meet the reporting criteria and timescales outlined in the Cash Activity Reporting Portal (CARP) Industry Handbook.

The following activities are authorized for BNCHs under the guideline: "Receiving naira-denominated deposits from individuals and businesses with large amounts of cash on behalf of financial institutions. On behalf of financial institutions, large amounts of cash are disbursed to members of the public "It stressed.

These banks, on the other hand, are prohibited from investing or lending. They are also prohibited from receiving, disbursing, or engaging in any foreign currency transaction, as well as subcontracting another firm to carry out their operations or engaging in any other transaction not permitted by the guideline.

Only deposit money banks and cash processing companies are permitted to apply for BNCH registration, with a non-refundable application charge of N100,000 and a non-refundable approval fee of N500,000.