Central Bank Debits Deposit Money Banks Another N216 Billion for Missing CRR Target
The Central Bank of Nigeria (CBN) has debited Nigerian banks a total sum of N216 billion for failing to meet a 27.5 percent Cash Reserve Ratio target.
In a report published by Reuters, the amount was debited ahead of CBN forex auction to reduce banks’ purchase capacity and subsequently ease pressure on the nation’s foreign reserves.
The central bank debited 26 banks a combined N216 billion. Below are the banks and the amount debited from each.
Access Bank Plc: N5 billion
Citibank: N11 billion
Coronation Merchant Bank: N2 billion
Ecobank: N9 billion
FBN Merchant Bank: N2.5 billion
Fidelity Bank Plc: N5 billion
First Bank of Nigeria Ltd: N15 billion
FCMB: N15.5 billion
FSDH: N251.2 million
Globus Bank: N1 billion
GTBank: N25 billion
Heritage Bank Plc: N1.5 billion
Keystone Bank Limited: N1.4 billion
Nova Merchant Bank Ltd: N6 billion
Providus Bank: N1.2 billion
Rand Merchant Bank: N335.5 million
Polaris Bank Ltd: N6 billion
Stanbic IBTC: N30 billion
Standard Chartered Bank: N10 billion
Sterling Bank Plc: N3.3 billion
SunTrust Bank: N683.9 million
Titan Trust Bank: N500 million
Union Bank of Nigeria Plc: N8 billion
Unity Bank Plc: N9 billion
Wema Bank Plc: N567.7 million
Zenith Bank Plc: N46.3 billion
It would be recalled that Investors King reported a similar action in May when the central bank debited this same 26 deposit money banks a total sum of N459.7 billion in May for failing to meet their CRR targets.
Last month, an anonymous banker said “We understand that the central bank had set up a special CRR team that is supposed to monitor banks’ CRR once a month. But now, the team monitors banks’ CRR on a weekly basis. This is why the central bank is effectively debiting banks on a weekly basis. Some weeks ago, they debited some banks about N1.4 trillion. That was one of many. Between that time and now, there have been more debits that have happened. But the debits that are huge/significant are what is troubling the banks. There was a N300 billion that happened about two weeks ago. and then yesterday that was this N459.7 billion that was also debited.”
“These are huge amounts that are leaving the banking sector. It’s a squeeze on the banks. A bank like First Bank, for instance, has about N1.4 trillion in CRR with the Central Bank. And there is Zenith Bank with equally as much as N1.5 trillion. These are monies that banks can potentially put in loans at 52% at 30%, or even put in money market instruments at maybe 10%. So, for a shareholder of these banks, this CRR debits are impairing the banks’ ability to increase their earnings because now are not able to use the funds that are legitimately theirs to create money for their shareholders. And the question is that under what framework is the Central Bank choosing to take people’s money?, the bank added.
