CBN Debits Banks N216 Billion for Not Meeting CRR Target

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.