CBN Bars Interest Payment On Bank Deposits

The Central Bank of Nigeria on Wednesday in a circular titled ‘Guidelines on accessing the CBN Standing Deposit Facility’ said the remunerable daily placements by banks at the Standing Deposit Facility will not exceed N2bn.

In the circular that was signed and sent to all banks by the Director, Financial Markets Department, Angela Sere-Ejembi, it said; “With reference to the circular to all banks and discount houses, Re: Guidelines on accessing the CBN Standing Deposit Facility, Ref: FMD/DIR/GEN/CIR/05/020 and dated November 6, 2014, after further review, the remunerable daily placements by banks at the SDF shall not exceed N2bn.

“The SDF deposit of N2bn shall be remunerated at the interest rate prescribed by the Monetary Policy Committee from time to time.

CBN Bars Interest Payment On Bank Deposits

“Any deposit by a bank in excess of N2bn shall not be remunerated.

“The provisions of this circular took effect on July 11, 2019.”

The guidelines for the operations of the SDF were reviewed in order to encourage banks to increase lending to the productive sector of the economy.

The review stated that the remunerated daily placements by banks and discount houses at the SDF should not exceed N7.5bn, which should be remunerated at the SDF rate at 10 per cent per annum.

“Any deposit by a bank or discount house in excess of N7.5bn must not be remunerated,” it added.

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