Cash Reserve Ratio: CBN debit 26 defaulting banks

The Central Bank of Nigeria (CBN) has again debited defaulting banks on their inability to meet up with Cash Reserve Ratio (CRR) target. This new debit is coming after 29 banks were debited over a trillion Naira for inadequate CRR earlier in April this year.

The CRR is the minimum percentage of total customer deposit that banks are to keep by law with the monetary authority (CBN) at zero interest rate. CRR in Nigeria is currently at 27.5% raised by 5 basic points from 22.5% in January 2020.

The January increase in CRR was part of a wide range of policy reform measure adopted by the Apex bank early in the year as a result of inflationary pressure on the economy.

Last month at the CBN’s Monetary Policy Committee (MPC) meeting, the committee members voted to retain CRR rate at 27.5%. also retaining all other policy rates apart from the Monetary Policy Rate (MPR) which was reduced by 100 points to 12.5%

The apex bank debited twenty-six banks, including commercial and merchant banks, a total of N459.7 billion for failure to meet their CRR obligations. The fresh round of debit, took place Thursday.

The banks most hit by the debit include United Bank for Africa Plc (N82.3 billion), First Bank of Nigeria Ltd (N59.3), Zenith Bank Plc (N50 billion), First City Monument Bank (FCMB) Limited (N45 billion), and Guaranty Trust Bank Plc (N40 billion).