CBN debits 15 Nigerian banks N838 billion as CRR deductions

Nigerian banks parted with a sum of N838 billion in CRR debits from the Central Bank of Nigeria (CBN) following the latter’s move to mop up liquidity from the Nigerian economy.

This is according to information provided to Nairametrics by reliable sources with knowledge of the debits. Banks often exchange information on direct debit from each other comparing notes to see who got hit the hardest.

The CBN does not report the list of banks debited.

The central bank had in the last monetary policy meeting communicated to the market that banks will be debited as part of their efforts to curb the increase in the money supply.

Banks debited for CRR

According to our data, about fifteen banks were debited a sum of N838.82 billion for not meeting the minimum of 32.5% CRR threshold stipulated by the Central Bank.

• The banks that were debited include Zenith, Access, UBA, FCMB, Fidelity, FBN, Union, Keystone, Titan, Polaris, Nova, Unity, Heritage, FBN Mortgage, and Suntrust Bank.
• A further breakdown of the data showed that Zenith Bank parted with N270 billion, followed by Access Bank with a deduction of N205 billion.
• UBA also saw N134 billion being deducted, while N90 billion was debited from FCMB. 
• Others include First Bank (N33 billion), Union Bank (N29 billion), Keystone Bank (N14 billion), Titan Bank (N11.6 billion), Polaris Bank (N10 billion), Nova (N5.5 billion), Unity Bank (N1 billion), Heritage Bank (N470 million). FBN Microfinance Bank (N460 million), and Suntrust Bank (N92 million). 

Why the debits

The increased CRR debit was deemed necessary given the rising inflation rate in the country and increased money in circulation, which has contributed to the record high inflation rate.

• Notably, the cash reserve requirement is the minimum amount banks are expected to leave/retained with the CBN from customer deposits.
• The CBN stated after the MOC meeting that the banks will be implementing aggressive cash reserve requirement measures by mopping up liquidity from commercial banks by Thursday, 29th September 2022.
• The governor noted that the increased liquidity is one of the major reasons for the currency depreciation and rising inflation rate. 

In case you missed it 

The Central Bank of Nigeria raised the benchmark interest rate in its 287th Monetary Policy Committee meeting to a two-decade high of 15.5%, retaining the asymmetric corridor of +100/-700 basis points around the MPR.  

• Also, the apex bank raised the CRR to a minimum of 32.5% from 27.5%, while retaining the liquidity ratio at 30%. The Central Bank noted that it was using a twin monetary approach of interest rate and CRR to combat the rising rate of inflation in the country.