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 market was informed by the central bank during the most recent monetary policy meeting that banks would be debited as part of their measures to stop the expansion of the money supply.
Data shows that fifteen banks in total were debited N838.82 billion for failing to achieve the Central Bank’s minimum 32.5% CRR requirement.
Zenith, Access, UBA, FCMB, Fidelity, FBN, Union, Keystone, Titan, Polaris, Nova, Unity, Heritage, FBN Mortgage, and Suntrust Bank are among the institutions that have been debited.
Zenith Bank left with N270 billion, according to a detailed analysis of the data, and Access Bank lost N205 billion.
While N90 billion was debited from FCMB, N134 billion was also taken away from UBA.
Other financial institutions include First Bank ($33 billion), Union Bank ($29 billion), Keystone ($14 billion), Titan ($11.6 billion), Polaris ($10 billion), Nova ($5.5 billion), Unity ($1 billion), and Heritage Bank ($1 billion) (N470 million). Suntrust Bank ($1 million) and FBN Microfinance Bank ($460 million) (N92 million).
The country’s rising inflation rate and the increased amount of money in circulation, which have both contributed to the record-high inflation rate, led to the enhanced CRR debit being deemed essential.
Notably, the cash reserve requirement specifies the minimal amount of customer deposits that banks must leave or preserve with the CBN.
Following the MOC meeting, the CBN said that by Thursday, September 29, 2022, the banks will begin implementing aggressive cash reserve requirement measures by snatching up liquidity from commercial banks.
The governor pointed out that one of the main causes of currency depreciation and rising inflation rate is the increased liquidity.
In its 287th Monetary Policy Committee meeting, the Central Bank of Nigeria increased the benchmark interest rate to a two-decade high of 15.5% while maintaining the asymmetrical buffer zone of +100/-700 basis points around the MPR.
The top bank also increased the CRR from 27.5% to a minimum of 32.5% while keeping the liquidity ratio at 30%. The Central Bank stated that it was battling the nation’s rising rate of inflation by employing a dual monetary strategy of interest rates and CRR.