- The Central Bank of Nigeria debited 10 banks about N1.62 trillion in the first six months of 2023
- The banks failed to maintain the mandatory Cash Reserve Ratio of 32.5% with the CBN in the first half of 2023
- The amount is the compulsory amount commercial and merchant banks must keep CBN from customers' deposits
For failing to meet the 32.5% Cash Reserve Ratio (CRR) threshold, the Central Bank of Nigeria (CBN) has debited about 10 banks N1.62 trillion in the first six months of 2023.
Zenit Bank, UBA, GTBank, FBN Holdings, FCMB, Fidelity, and Stanbic IBTC Holding are among the banks debited by the apex bank.
Others are Wema Bank, Sterling, and Unity banks.
Banks running short of cash with CBN
CRR is the minimum amount commercial and merchant banks are expected to keep with the CBN from customer deposits.
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It carries no interest and is not available for use by the banks in their daily transactions.
ThisDay reports that the banks' results and accounts for the period ended June 30, 2023, revealed that the 10 banks' compulsory reserve deposit with the apex bank in the 2022 financial year stood at N9.11 trillion compared with the N7.49 trillion as of June 30, 2023.
Top banks debited by CBN
CBN debited Zenith Bank N580.49 billion as of June 30, 2023, at N2.25 trillion from N1.67 trillion in the 2022 financial year.
UBA was debited about N356.37 billion by CBN in the first six months of 2023 to N1.64 trillion from N1.28 trillion reported in the 2022 financial year.
GTBank maintained its CRR with CBN at N1.22 trillion, representing an N208.5 billion increase from N1.01 trillion in 2022.
FBN Holdings added N199.91 billion to its CRR with CBN in the period under review.
GTBank explained that the pressure from competition and the need to keep the mandatory CRR debits led the Group to maintain an average liquidity ratio of 36.6% during the period under review.
First Bank's CRR with CBN stood at N1.76 trillion at the end of June 2023 from N1.56 trillion in 2022.
Unity Bank reported about N3.66 billion CRR with CBN to N69.05 billion as of June 30, 2023, from N72.71 billion in the bank's 2022 financial statement.
Currency in circulation rises to N2.7 trillion
Data from the CBN as of Thursday, September 21, 2023, shows the currency in circulation hit about N2.7 trillion at the end of August 2023.
In February 2023, the country had a mere N982.1 billion as currency in circulation following the naira redesign policy of the CBN.
The amount has increased since the policy ended, and cash mopped up from the system returned.
The money in circulation in Nigeria dropped by about 235.03% to N982.1 billion at the end of February this year from N3.29 trillion at the end of October 2022, when CBN announced the naira redesign policy.
CBN data shows that it mopped up N2.3 trillion from circulation during the period under review.
Punch reports that the apex bank defines money in circulation as currency outside the banking system and the vaults of the CBN.
It means all legal tender currencies are in the hands of the public and commercial banks' vaults.
Also, Banks' borrowings from the Central Bank of Nigeria surged in September from N322.97 billion in August to N3.03 trillion, an increase of 835%.
Banks borrow N3 trillion from CBN in 22 days
Banks’ borrowings from the CBN surged in September from N322.97 billion in August to N3.03 trillion, an increase of 835%.
Similarly, the CBN has invested almost N10 trillion in different sectors of the Nigerian economy over the years.
According to data from CBN, from early September to Friday, September 22, 2023, total banks' borrowings from the apex bank stood at N3.028 trillion.
The banks accessed the borrowings through the Lending Facility of the CBN. The Standing Lending Facility (SLF) is a short-term credit that commercial banks draw from when they need short-term customer withdrawals.
CBN combs account, debits beneficiaries to recover COVID-19 loans as debtors recount Experiences
Legit.ng reported that the CBN is set to recover loans it granted to some Nigerians to cushion the impact of COVID-19.
According to the News Agency of Nigeria (NAN), the apex bank is targeting beneficiaries of Targeted Credit Facilities (TCF) it granted to some Nigerians in 2020 to reduce the economic impact of COVID-19.
Some of the beneficiaries, who were caught unaware, expressed displeasure with how the CBN handled the loan recovery.