CBN slams 26 banks with N216.1 bln CRR debit, Zenith, GTB, FCMB top list
The Central Bank of Nigeria (CBN) on Friday withdrew a total of N216.11 billion from 26 banks in compliance with the 27.5 percent cash reserves requirement (CRR), traders said.
However, three commercial lenders, United Bank for Africa (UBA), Jaiz Bank and TAJ Bank escaped the CRR hammer as they were not debited with any amount, according to the details of the withdrawal obtained by Global Financial Digest from the market.
The debiting took place ahead of the sales of dollars by the CBN on the domestic foreign exchange market, where commercial lenders bids on behalf of their customers.
Six of the banks debited accounted for 63.52 percent of the total amount withdrawn from the banking system on Friday, with Zenith Bank vault depleted by N46.27 billion, the highest debit by the regulatory bank.
Other lenders that were debited the heaviest are Stanbic IBTC with N30 billion, Guaranty Trust Bank cough out N25 billion, First City Monument Bank (FCMB)was debited with N15 billion, Citibank N11 billion while Standard chartered bank was debited with a total of N10 billion.
The debiting from commercial lenders has become frequent in recent time as the CBN trying to curb speculation against the local currency as the country’s foreign exchange reserves continue to drop.
The forex buffer declined to $36.316 billion by June 18, after it peaked at $36.59 billion on May 29 on the inflows of dollars from International Monetary Fund (IMF) facilities and recovered loot from late Sani Abacha.
Nigeria’s banking regulator had last year raised the loan-to-deposit ratio to 65 percent in a bid to boost credit to the private sector and increase growth in Africa’s biggest economy.
The CBN also raised the CRR to 27.5 percent from 22.5 percent at the end of its Monetary Policy Committee (MPC) meeting in January to curb excess liquidity in the banking system and curtail pressure on the local currency against dwindling foreign exchange reserves. #GFD