CBN Issues Cash Hub Consultation

The Central Bank of Nigeria (CBN) is planning to introduce Bank Neutral Cash Hubs (BNCH). It has issued a consultation paper en route to issuing final guidelines, and the draft proposals lay out the CBN’s vision and intentions.

The aim is to reduce the cash management costs and risks for banks and other financial institutions (OFI) by introducing more flexibility and capacity into the system. The BNCHs will allow cash handling irrespective of where the cash originated, although there are transaction limits. At the moment some cash handlers in busy areas face significant stress given the volumes of cash having to be moved each day to the banks for deposit.

In addition to the CBN are the Deposit Money Banks (DMB) and Cash Processing Companies (CPC), which are the institutions allowed to apply to be BNCHs. The plan is they will run the BNCHs, receiving money via the cash in transit (CIT) companies from the commercial banks and OFIs.