In demonstration of its support for the Central Bank of Nigeria (CBN)’s cash-less policy, the 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.

According to the Head, Shared Services, CBN, Chidi Umeano, 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, adding that a vendor had already 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 apex bank was already drafting contract agreement that will be reviewed and binding on both parties, stating that the banking watchdog was also developing modalities or work plan for implementation of shared tier-three DRC infrastructure and services.

  “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.

Umeano further explained that the CBN was working with the banks to ensure greater efficiency in the payment system, adding that cash management constituted almost 80 per cent of bank infrastructure and staff, which directly drives up the cost of banking service.

He said that the CBN ,having monitored the partial implementation of the cash-less policy and following stakeholders’ 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 hasd 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.