CBN Debits 20 Banks N118bn for Default on CRR, LDR
The Central Bank of Nigeria has withdrawn a total of N118 billion from the accounts of some banks for falling short of the cash reserve requirement as well as the stipulated loan to deposit ratio , THISDAY learnt yesterday.“The accounts of about 20 banks were debited on Friday. The CBN does weekly maintenance and once any bank is not meeting up with the stipulated CRR and LDR, it sterilises their cash,” the source stated.
Liquidity management involves the supply or withdrawal from the market the amount of liquidity consistent with a desired level of short-term interest rates or reserve money. CBN Governor, Mr. Godwin Emefiele, recently said there was “ample liquidity buffers for the sector, even with the over N10 trillion maintained today in the cash reserve balances of the CBN.”
“Under our loan to deposit ratio policy, total gross credit increased over N3 trillion to about N15.5 trillion at the end of May 2019, to about N18.6 trillion as at the end of April 2020. The credit growth was largely recorded in manufacturing, consumer credit, general commerce, information and communication, and agriculture. And of course, we also saw interest coming from borrowers because of reduced lending rate,” he had said.
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