CBN Debits 23 Banks N349.72b for CRR Breach

The Central Bank of Nigeria (CBN) has debited the accounts of 23 deposit money banks with N349.72 billion over Cash Reserve Ratio (CRR) breaches.

The debits are the latest in the regulator’s CRR debits meant to get the banks to lend to real sector operators.

The debits are also part of the apex bank’s move to mop up liquidity as inflation uptick persists.

The CRR debit for last month stood at N226 billion.

The CRR is pertinent because, among others, it helps the apex financial institution to redirect focus to other strategic sectors of the economy such as the real sector, a goal that aligns with that of the central bank.

It’s also an important tool in managing the country’s foreign exchange liquidity since the whittling down of CBN’s OMO borrowing.

By the CRR policy, banks have a mandate to keep 27.5 per cent of deposits with the CBN.

Fitch Ratings predicted a 20 per cent hit in the banks’ revenue this year due to the CRR policy and foreign exchange shortage.

It said Nigeria’s banks would face rising borrowing costs as the CBN’s measures to support naira squeeze lenders, who already hit by COVID-19 pandemic and oil price shocks.

About globaltellblog24

Check Also

With Naira Redesign, Dollar May Crash To N200 – EFCC Chairman, Bawa

The Chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, has said the …