Central Bank of Nigeria (CBN) has approved the revised guidelines for private sector participation as Cash In Transit (CIT) firm or as Cash Processing firm.
The apex bank made this move in a bid to increase private sector participation in currency management.
Understanding the CIT
The CIT is the physical transfer of banknotes, coins, credit cards and items of value from one location to another. The locations include cash centers and bank branches, ATM points, large retailers and other premises holding large amounts of cash such as ticket vending machines and parking meters.
Many cash in transit companies are private security companies that offer cash handling as part of their services.
By law, the CIT companies are seen as logistic companies in the private security industry and therefore have to comply with transport and security legislation.
The CIT industry is regulated by national, regional and local legislation, social regulations and current practices.
CIT industry activities
Inside the CIT, companies are specialised in the transportation and processing of cash and valuables. They transport banknotes, coins, bulk cash, diamonds, non-personalised smart cards, non-personalised passports, and other valuables.
How CIT firms operate with banks
As part of the support services the companies will provide banks, the CITs will be expected to pick up cash on behalf of some of their customers who deal with large volumes of cash on a daily basis. These include supermarket chains, airlines, fast food joints and big traders in markets like the Alaba International Market, Lagos.
In the past, banks were said to have offered this service to such customers for free. But the CBN has directed that CITs to take over the pick-up service while banks should charge customers accordingly.
Banks are also being encouraged to consolidate the movement of cash through shared services. This means that bank branches within a particular vicinity will be encouraged to come together to use the services of CITs to move cash between branches as a cost cutting measure.