- No More Treasury Bills for Individuals Says CBN
In a bid to compel individuals to invest in the economy, the Central Bank of Nigeria has directed all Deposit Money Banks and other financial institutions to cease the sale of treasury bills to individuals and small firms starting from November 29.
Bank officials who disclosed this to Punch correspondents said only big corporate organisations would be allowed to invest in treasury bills henceforth.
This is in-line with the CBN policy of stimulating growth via new investment and job creation. It should be recalled that the CBN enforced banks’ loan-to-deposit ratio of 60 percent then increased it to 65 percent to force financial institutions to lend more to the real sector.
While, existing treasury bills investment would be allowed to continue until the end of their maturity, operators are trying to see if the deadline could be extended to allow financial institutions enough time to create awareness.
A bank official said, “Operators are trying to see if the November 29 deadline given for the implementation by the CBN could be extended, so as to create enough awareness. But there is no move for the reversal of the directive.”
The move is expected to boost savings deposits across banks, however with interest below what the treasury bills offered and in some cases force individuals with huge capital to invest in the economy instead of keeping their funds idle.
A source from the CBN said, “Many people with huge cash prefer to keep their funds idle in treasury bills instead of investing the funds. Some people collect huge severance package, have huge funds but they have refused to invest the money.
“We want these funds to be useful in the economy so that they will be available in the banks and can be invested to create more jobs in the country.”