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Business News of Thursday, 26 January 2023


Cash withdrawal limit vs banks neutral cash hubs

Central Bank of Nigeria (CBN) Central Bank of Nigeria (CBN)

The Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee, has introduced cash collection centres called Bank Neutral cash hubs.

This is to enable it to reduce cost and improve operational efficiency in the country’s cash management value chain.

The policy implementation comes at time the CBN reviewed the weekly cash withdrawal limit to N500,000 and N5 million for individual and corporates.

The policy shift was announced last Wednesday by CBN Director, Banking Supervision Department, Haruna Mustafa.

This represents 400 per cent increase, from N100,000 and N1 million withdrawal limit for individuals and corporates set by the apex bank in its December 6 circular.

In a letter to Deposit Money Banks (DMBS) and Other Financial Institutions-Payment Service Banks (PSBs). Primary Mortgage Banks (PMBs), Microfinance Banks (MFBs), Mobile Money Operators (MMOs) and Agents, he reviewed the feedback from stakeholders.

He said: “The maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall be N500,000 and N5 million. In compelling circumstances where cash withdrawal above the limits is required for legitimate purposes, such requests shall be subject to a processing fee of three per cent and five per cent for individuals and corporate organisations.”

Also, the inauguration of Banks Neutral Cash Hubs is meant to reduce costs and improve the efficiency in cash management value chain.

The cash collection centres, codenamed Bank Neutral Cash Hubs (BNCH), is expected to run on the technology deployed by the entities.

How this technology will work is stated in the guidelines for the BNCH released by the apex bank.

The regulator said the technology implemented by the BNCH must comply with the industry standards.

The BNCH, it said, will ensure that transaction information is transmitted. The technology deployed comprises a set of infrastructure modules that work with the platform provided by the Nigeria Interbank Settlement System (NIBSS) and that customers get value for transactions.

The CBN also directed that BNCH‘s payment instructions are executed, and immediate reversal effected. Where there is a communication failure during a transaction, receipts or durable acknowledgements transactions must be generated.

Also, audit trail is maintained and made available on request while settlement information details are preserved for five years, and are made available via the Cash Activity Reporting Portal (CARP). (

The BNCHs are also required to put in place systems that address availability of services, data confidentiality and integrity, encryption of e-transactions.

Also to be addressed are customer accountability and non-repudiation of transactions, error messaging and exception handling, and the need to secure integration to the Cash Activity Reporting Portal (CARP).

The apex bank said the scheme would reduce costs and improve efficiency in the value chain.

“The financial requirements for an approval to operate as BNCH, which may be amended by the CBN as it deems necessary, include non-refundable application fee of N100,000; and non-refundable approval fee of N500,000. ”The BNCHs are cash collection centres 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 guideline added.

Continuing, the CBN said the key objective of setting up a BNCH is to reduce the risks and costs borne by banks, merchants and huge cash handlers for cash management, deepen financial inclusion, and leverage shared services to enhance cash management.

The regulator also spelt out functions of a BNCH, saying it may receive naira- denominated deposits from individuals and businesses with high volumes.

According to the guidelines, the CBN has the right to access a BNCH facility for compliance monitoring and examination of records/books.

Also, the BNCH must comply with the reporting requirements and timelines specified in the Cash Activity Reporting Portal (CARP) Industry Handbook. The total number of customers and cumulative value and volume of transactions to their name,volume and value of withdrawal and deposit transactions, incidents of fraud, theft or robbery, nature and number of customer complaints and remedial measures taken.

The BNCH will include in its yearly reports and accounts its activities.

More details on cash withdrawal limit

The CBN also stated: “Monthly returns on cash withdrawals above the specified limits should be rendered to the Banking Supervision, Other Financial Institutions Supervision and Payments System Management Departments.

“Compliance with AML/CFT regulations relating to KYC, customer due diligence, currency and suspicious transaction reporting etc. is mandatory in all circumstances.”

It said customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD cards/POS, eNaira, etc.) to conduct their banking transactions.

The apex bank added: “Bank and Mobile Money Agents are important participants in the financial system, enabling access to financial services in underserved and rural communities They will continue to perform these strategic functions, in line with existing regulations governing their activities.

“The CBN recognises the vital role that cash plays in supporting underserved and rural communities and will ensure an inclusive approach as it implements the transition to a more cash-less society,” it said. “All banks and OFIs are to note that aiding and abetting the circumvention of this policy will attract severe sanctions The above directives supersede that of December 6, 2022 and take effect nationwide.”