CBN Debits Banks N120.2Bn over CRR Failures

Central Bank of Nigeria (CBN) has debited commercial and merchant banks in the country a total of N120.2 billion for failing to live up to the cash reserve requirement (CRR) obligations, according to a report by Nairametrics.

It is estimated that CRR debits implementation has seen the CBN sequester over N10 trillion from banks in the last one and half years.

The central bank debits bank deposits when they do not meet the minimum lending requirement imposed by the apex bank.

The report further reveled that Zenith Bank topped the list with about N39 billion debited followed by Citi Bank and UBA with N16 billion and N12 billion respectively.

A total of 15 banks had their CRR debited out of the 28 banks currently listed by the CBN as commercial and merchant banks.

Recently, the CBN introduced zero-coupon Special Bills which are issued to banks in exchange for the CRR debits. Critics of the CBN’s CRR debits suggest the money is used to fund the apex bank’s intervention programs in the economy as well as fund the government’s revenue shortfall via Ways and Means.

Banks, on the other hand, complain that the CRR debits have affected interest margins as they will rather have their vaults debited than increase their risk profiles.