CBN Issues Strict Guidelines For New Cash Centres

By Tosin Olatokunbo

Apex Bank Raises Online Transfer To N250m

The Godwin Emefiele-led Central Bank of Nigeria, CBN has issued guidelines for setting up Bank Neutral Cash Hubs, BNCHs also known as cash centres. The apex bank had in March this year introduced BNCHs to reduce cost and improve operational efficiency in the country’s cash management system.

The CBN said on Thursday that the guidelines will provide the apex bank effective capacity to manage the operations of BNCHs.

The major point of the guidelines is that only Deposit Money Banks, DMBs, and Cash Processing Companies, CPCs, are eligible to apply for licenses for BNCHs.

The CBN also prohibits BNCHs from investing or lending activities such as receiving, disbursing or engaging   in any transaction involving foreign currency.

According to the guidelines, “BNCHs are cash collection centers to be established by registered (licensed) 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. 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.

“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.”

“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; disbursement of Naira denominated withdrawals on behalf of financial institutions to individuals and businesses with high volumes of cash.; and any other activities that may be permitted by the CBN.

The CBN, has therefore, urged those interested in setting up BNCHs to “submit a formal application to the Director, Currency Operations Department, COD, requesting to be granted approval to operate a BNCH, which shall be processed in two stages, namely: Approval-in-Principle, AIP, and Final Approval.

“Note that a formal application for approval shall be made for every new BNCH site to be set up,” the bank said in the guidelines.

Such promoters, the apex bank said are requested to apply in writing to the Director, Currency Operations Department, COD.

Meanwhile, the CBN has raised the limit for ‘Highly Secured Online Funds Transfer from N100 million to N250 million for Companies and from N10 million to N25 million for individuals. What this means is that customers could transfer as much as N250 million and N25 million, for corporate and individual, respectively from their various online transactions.

This was disclosed in a circular, signed by Musa I. Jimoh, Director, Payments System Management Department yesterday.