CBN Headquarters
By Obinna Chima
The Nigeria Interbank Settlement System (NIBSS) has said that licenced Cash-in -transit (CIT) companies would take over cash management services in the country from June this year.
NIBSS also said it would soon implement the cheque truncation system aimed at phasing out physical clearing of cheques and reduce the clearing days for banks by at least one day.
Acting Managing Director, NIBSS, Mr. Niyi Ajao, made this remark yesterday, while speaking at the bi-monthly discourse of the Finance Correspondents Association of Nigeria (FICAN).
NIBSS is owned by all deposit money banks in Nigeria and the Central Bank of Nigeria (CBN). The body is a key player in inter-bank clearing and settlements.
NIBSS is owned by all deposit money banks in Nigeria and the Central Bank of Nigeria (CBN). The body is a key player in inter-bank clearing and settlements.
According to Ajao, merchant, supermarkets, churches and other businesses in the country would have to rely on the licenced CITs to evacuate their cash from that date. Some of the CITs licensed by the apex bank to carry out this function include Messrs Bankers Warehouse Limited and the Integrated Cash Management System Limited.
The NIBSS boss emphasised the need for Nigerians to support the cash-less policy initiatives, saying that it ensures security and convenience for payer and payee as well as reduces the overall cost of banking and payments. This, he said would also lead to a reduction in bank charges.
“Going cash-less will check corruption, reduce the rate of armed robbery and make our lives more convenient. Going cash-less will also reduce the cost of operations in banks as well as bank charges. Banks are in business and like any legitimate business; they look at the cost before determining how much charge they are going to apply on the customer.
“Studies have shown that one more component of banks’ cost is the cost of handling cash, counting cash, storing it, transporting cash, all put together and has to be passed across to customers,” he explained.
He pointed out that the payment system in any country was an important national infrastructure, just like electricity, transportation, telecommunication, amongst others.
“That is why if you go to any country today, there are deliberate policies set up to improve the payment system,” he added.
He listed alternatives to cash payment to include cheque, bank transfer, Same-Day Inter-Bank Transfer, NIBSS Instant Payments (NIP), Standing Orders, Direct Debits, Payment Cards, Automatic Teller Machines (ATM), Point of Sale (PoS) Payments, Mobile Payments, among others.
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