The National Bank of Ukraine will issue licenses to legal entities to carry out cash collection services. To obtain such a license, a legal entity will be required to meet a number of requirements, reads NBU Board Resolution No. 926, dated 24 December 2015, On Approval of the Regulation On the Procedure for Issuing Licenses to Legal Entities for Carrying Out Cash Collection (hereinafter Resolution No. 926), which comes into effect on 1 January 2016.
Additionally, Resolution No. 922, dated 23 December 2015, has amended the Instructions Governing the Collection of Funds and Transportation of Currency Valuables in Ukrainian Banking Institutions.
This move has been prompted by the need to streamline cash handling processes based on contemporary international best practices that provide for the possibility to engage specialized companies (Сash-in-Transit companies or СІТ-companies) in outsourcing projects for cash handling services, in particular projects involving the provision of cash collection services to banks.
Director of the NBU Cash Circulation Department Viktor Zaivenko pointed out that leading European countries' experience shows that outsourcing projects involving the transfer of cash collection services to СІТ-companies proved successful.
“СІТ-companies provide cash-in-transit services to both banks and their clients, fully meeting their needs in these services. Furthermore, outsourcing will allow banks to reduce cash handling costs owing to larger cash flows and streamlined operational processes. Large banks’ retail networks handling large cash flows are interested in cash collection, cash-in-transit, and cash logistics services provided by professional companies,” said Mr Zaivenko. “Experience shows that contracting out these services to external service providers brings cost saving benefits to banks, enabling them to cut capital investments and staff costs, reduce insurance, as well as procurement and logistics expenses.”
According to Mr Zaivenko, Resolution No. 926 is intended to contribute to the improvement of banks’ financial conditions, as it would enable banks to use funds available from a reduction in cash handling costs to increase their capital.
He added that a number of security risks associated with cash transportation are transferred to СІТ-companies.
“The introduction of outsourcing in cash handling services will contribute to an enhanced competitive environment, rationalize tariffs to appropriate levels, help reduce the financial burden on banks, and enhance the security of valuables during the collection and transportation process. Furthermore, we expect new services that meet European quality standards to be launched in Ukraine, thus boosting investment activities,” explained Mr Zaivenko.