•By Halimah Olamide
The Central Bank of Nigeria (CBN) has announced its motive to update its cash reserve requirements.
According to a circular signed by the Director, Banking Supervision Department, Dr. Adetona Adedeji, it will be ceasing daily CRR debits
The move is intended to facilitate capacity for planning, monitoring, and aligning records with the CBN.
The determination of the segment of deposits subject to sterilization with the CBN as CRR will follow the processes outlined as follows:
Phase 1- Utilization of the Incremental Approach: The extant ratios (commercial banks 32.5% and merchant banks 10%) will be applied to increases in the banks’ weekly average adjusted deposits.
Phase 2- CRR levy of 50% of the lending shortfall will be enforced for banks that do not meet the minimum Loan to Deposit Ratio (LDR) as per our correspondence to all banks referenced BSD/DIR/GEN/LAB/12/049 dated September 30, 2019.
“The CBN will provide your bank withdetails ofthe applied charges and their underlying computation rationale.” The statement read.