CBN ANNOUNCES CURRENCY SORTING INCENTIVES FOR BANKS
By BABAJIDE KOMOLAFE
The Central Bank of Nigeria (CBN) has announced incentives aimed at encouraging banks to patronise the currency sorting services of licensed cash management service providers.
Governor, CBN, Malllam Lamido Sanusi disclosed this during the presentation of registration certificates to Bankers Warehouse and Integrated Cash Management Services (ICMS) to provide cash-in-transit and currency sorting services to the banking industry.
He said, 'The banks are expected to avail themselves of the currency sorting capacities of the registered service providers when they commence currency sorting.
Deposits made with service providers for sorting will be given off-balance sheet treatment by CBN. In other words, the banks will be given value for the approved period of processing on a same-day basis as if the cash has been deposited in any CBN branch.
As an incentive, CBN will bear the cost of transportation of unfit cash generated from processing, as well as the volume of fit notes the deposit money banks are willing to deposit with it. In other word, the concept of cash-held-to-order of CBN is gradually but consistently introduced.
'This arrangement will facilitate the trading of excess cash among banks, thereby moderating the frequency of cash withdrawals from CBN. This arrangement calls for investment in ICT by the service providers and effective oversight on the part of CBN.
I will like to assure you that CBN will institutionalize an oversight arrangement which will enhance best practice on the part of registered service providers and build confidence of banks and non-bank customers in their operations and processes. For cash withdrawal from CBN by banks, the current procedure still subsists'.
He said that the policy of registration of companies providing cash services in Nigeria is not only consistent but also complimentary to the cash policy guidelines recently announced by the CBN.
'Both policies are aimed at moderating the cost of cash operations to banks with a view to lowering the gap between the deposits and lending rates and enhance accessibility to credit', he said
'While the Cash Service Provider Registration Policy seeks to promote the use of shared services in the banking industry in Nigeria with a view to driving down the cost of operations, the Cash Policy seeks to moderate the massive use of cash for transactions and encourage the use of more efficient non-cash alternatives.