“N500k minimum transactions” – CBN introduces cash collection hubs for withdrawals and deposits

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The Central Bank of Nigeria (CBN) has introduced fund collection centers called Bank Neutral Cash Hubs (BNCH), which are to be established by Registered Processing Companies or Depository Banks (DMBs) depending on the needs of the business..

The apex bank said so in the guidelines for the registration and operation of the BNCH in Nigeriareleased on Monday and signed by Ahmed.B.Umar, Director, Foreign Exchange Department.

The CBN said BNCHs would provide a platform for customers to make cash deposits and receive value, regardless of which bank their account is domiciled with.

They will be located in areas with a high volume of commercial activity and cash transactions.

“The main objective of setting up Bank Neutral Cash Hubs (BNCH) is to reduce the risks and costs incurred by banks, merchants and large cash managers in carrying out cash management activities; deepen financial inclusion; leverage shared services to improve cash management efficiency,” the directive reads.

“A BNCH may carry out the following operations: receiving naira-denominated deposits on behalf of financial institutions from individuals and businesses with large volumes of cash; High volume cash disbursement to members of the public on behalf of financial institutions; any other activity that may be authorized by the CBN.

BNCHs are, however, not permitted to engage in investment or lending activities.

They are also not permitted to receive, disburse or engage in any transaction involving foreign currencies or subcontract any other entity to carry out its operations as well as undertake any other transaction not prescribed by the directive.

Regarding the deposit and withdrawal limit at the treasury centre, the apex bank has specified a minimum transaction value of N500,000 for individuals and a minimum transaction value of N1 million for corporate entities.

Only custodian banks and cash handling companies are allowed to apply for permission to operate registration at the BNCH and pay a non-refundable application fee of N100,000 and a non-refundable approval fee of 500,000 N.

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