By Hamisu B. S
the Central Bank of Nigeria has directed that banks’ daily deposits placement through the CBN’s Standing Deposit Facility, shall no longer exceed N2 billion.
In circular dated July 10, 2019 released on the CBN’s website titled “Re: Guidelines on accessing the CBN Standing Deposit Facility CBN stated that any deposit by a bank in excess of N2 billion shall not attract any interest.
The circular, signed by Director of Financial Markets Department, Angela Sere-Ejembi stated the provision of the circular takes effect from July 11, 2019.
It will be recall in November 2014, the Central Bank of Nigeria observed that deposit money banks have preference of keeping their idle balances in Standard Deposit Facility with the CBN. This practice constrains the financial intermediation process. The CBN reviewed the guidelines for the operation of the standing deposit facility. The review recommended that daily placements at the SDF should be remunerated at the SDF rate at 10% annually.
Earlier in the month In its efforts to encourage SMEs, Retail, Mortgage and Consumer lending in the Nigerian economy the Central Bank of Nigeria In a letter address to all Nigerian Banks, announced that all deposit money banks are required to maintain a minimum Loan to Deposit Ratio (LDR) of 60% by September 30, 2019. Subject to quarterly review.