CBN debits banks N216.1 billion for CRR compliance

Nairametrics has just gathered from very reliable sources that the Central Bank of Nigeria (CBN) has debited 26 banks the sum of N216.1 billion for CRR (Cash Reserve Ratio) compliance.

Recall that it has been barely two weeks ago since the apex bank debited banks to the tune of N459.7 billion for the same reason. And the reason for the constant debits could be beyond the need for banks to meet CRR target.

The latest CRR debit is coming ahead of the CBN’s foreign exchange auction. An insider, who earlier spoke to Nairametrics on condition of anonymity, revealed that this has become a tradition.

Because they don’t want banks coming with huge demands to the FX auction, what they do is that a day before the FX sales, they debit the banks so that the naira you have available is small and you cannot put them under pressure because of your FX demands,” the source said.

Among the 26 banks whose cash reserves were debited earlier today are regular “victims”, including Access Bank Plc, Guaranty Trust Bank Plc, and Zenith Bank Plc. See the full list below.

  • Access Bank Plc: N5 billion
  • Citibank: N11 billion
  • Coronation Merchant Bank: N2 billion
  • Ecobank: N9 billion
  • FBN Merchant Bank: N2.5 billion
  • Fidelity Bank Plc: N5 billion
  • First Bank of Nigeria Ltd: N15 billion
  • FCMB: N15.5 billion
  • FSDH: N251.2 million
  • Globus Bank: N1 billion
  • GTBank: N25 billion
  • Heritage Bank Plc: N1.5 billion
  • Keystone Bank Limited: N1.4 billion
  • Nova Merchant Bank Ltd: N6 billion
  • Providus Bank: N1.2 billion
  • Rand Merchant Bank: N335.5 million
  • Polaris Bank Ltd: N6 billion
  • Stanbic IBTC: N30 billion
  • Standard Chartered Bank: N10 billion
  • Sterling Bank Plc: N3.3 billion
  • SunTrust Bank: N683.9 million
  • Titan Trust Bank: N500 million
  • Union Bank of Nigeria Plc: N8 billion
  • Unity Bank Plc: N9 billion
  • Unity Bank Plc: N567.7 million
  • Zenith Bank Plc: N46.3 billion

Understanding CRR: The cash reserve requirement is the minimum amount banks are expected to retain with the Central Bank of Nigeria from customer deposits. In January, the CRR was increased by 5% to 27.5%  by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.

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