In demonstration of its support for the Central Bank of Nigeria’s (CBN) cash-less policy, United States Trade and Development Agency (USTDA) has provided a grant of $510,000 for the establishment of a Disaster Recovery Centre (DRC) to fortify and protect e-payment transactions in the country.

Head Shared Services, Chidi Umeano, who made this known in Lagos, said the grant will be used to finance qualified US firm to provide expert consulting services in determining the technical requirements, business and operational models for the project.

Already, a vendor has been evaluated and selected by the CBN, which has also received a ‘letter of no objection’ from USTDA. Besides, he said the legal unit of the CBN is already drafting contract agreement that will be reviewed and binding on both parties.

Besides, he said the banking watchdog is also developing modalities or work plan for implementation of shared tier-three Disaster Recovery   Centre infrastructure and services.

The apex bank is also working on shared power infrastructure service to the banks, as well as developing the Nigeria Financial services network (NFSN) to effectively achieve these objectives.

“The CBN is also setting up IT Standards Board and requisite governance framework to oversee the administration of IT standards in the industry and drive its adoption across the players in the industry. We understand that payment is the key driver of cost distribution in the industry and accounts for almost sixty per cent of the industry cost base,” he said.

Consequently, Umeano explained that the CBN is working with the banks to ensure more efficiency in the payment system, adding that cash management constitutes almost 80 per cent of bank infrastructure and staff, which directly drive up, the cost of banking service.

He said that the CBN having monitored the partial implementation of the cash-less policy and following stakeholder engagement on the effective implementation of the project, decided to reassess its parameters to allow for smooth transition and adoption.

For instance, the apex bank has given exemptions to Ministries, Departments and Agencies (MDAs) of the federal and state governments on lodgments for revenue collections only.

Umeano said the cash-less initiative has tremendous benefits for the people and the economy. It would reduce the cost of cash handling and cost of funds; with available statistics showing that the Central Bank and the banks would have spent over N200 billion on cash management by 2012.

This cost he explained, can be ploughed into infrastructure development. It would also mean that majority of Nigerians would stop subsidizing the cash handling cost of heavy cash users,” he said.

He added that only 10 per cent of branch transactions in Nigeria are above N150, 000, but they make up about 77 per cent of the value of cash transactions in the country’s financial system. The initiative will also usher in an era of convenient and secure payment systems, he said.

He explained that the policy was designed to promote financial intermediation, financial inclusion, minimise revenue leakages in the economy.

N500, 000 daily across the counters and ATM. Withdrawal above the free limit will attract processing fees of three per cent for every N1000 above the limit. Corporate customers are allowed to make free cumulative withdrawal or deposit of N3 million daily. Withdrawal above the free limit will attract a processing fee of five per cent for every N1000 above the limit.