Finance
OTC Trade Settlement: CBN Orders Banks to Pledge N1bn
- OTC Trade Settlement: CBN Orders Banks to Pledge N1bn
The Central Bank of Nigeria has ordered the pledge of N1bn worth of government or the CBN securities as collateral for over-the-counter trade settlement by the Deposit Money Banks.
The bank said in a circular on Friday that the pledge requirement was mandatory for all banks that wished to participate in the OTC trade settlement.
The statement, which was signed by the Director, Financial Markets Department, CBN, Dr. Alvan Ikoku, said the order was in an effort to enhance efficiency in trading and post-trade activities, and build confidence in the financial markets.
“Lack of provision of the pledge or failure to top-up a pledge when required would result in exclusion from the market. This circular takes effect from June 1, 2018,” it said.