The Central Bank of Nigeria said it has set the minimum transaction limit for corporate and individuals transacting with Bank Neutral Cash Hubs at N1 million and N500,000 respectively.
This was made known in a guideline for the registration and operation of Bank Neutral Cash Hubs in Nigeria released on Monday.
“The threshold for eligible transactions at a BNCH shall be as follows: A minimum transaction value of N500,000 for individuals; a minimum transaction value of N1m for corporate entities,” the apex bank said,
The banking regulator explained that it launched the Nigerian Cash Management System as part of efforts to reduce cost and improve operational efficiency in the country’s cash management value chain in collaboration with the Banker’s Committee.
Noting that one of the initiative towards the goal is the Bank Neutral Cash Hubs, the CBN said, “BNCHs are cash collection centres to be established by registered processing companies or Deposit Money Banks 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.”
It further said that the guideline aims to provide minimum standards and requirements for BNCH registration and operations for effective supervision.
According to the CBN, one of the key objectives for setting up the BNCH is to minimize the risks and costs 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.
“High volume cash disbursement to members of the public on behalf of financial institutions; any other activities that may be permitted by the CBN.
“BNCH shall not carry out investing or lending activities; receive, disburse, or engage in any transaction involving foreign currency; undertake any other transaction which is not prescribed by this guideline; sub-contract another entity to carry out its operations; any other activities that may be prohibited by the CBN,” the apex bank added.