CBN stops ad hoc CRR debits on banks

The Central Bank of Nigeria (CBN) on Friday declared a significant shift in its approach to Cash Reserve Requirements (CRR) by discontinuing daily CRR debits and introducing a revised mechanism.

This was disclosed in a circular to all banks, dated February 2, 2024 and signed by Adetona S. Adedeji, acting director, banking supervision department.

The move aims to enhance commercial banks’ planning, monitoring, and aligning records with the directives of the CBN.

The implementation of the new Cash Reserve Requirement framework will follow a structured process, as outlined by the banking and financial institutions regulator.

Consequently, the CBN said the existing ratio of 32.5 percent will be applied to increases in the weekly average adjusted deposits of banks. This incremental approach seeks to provide a measured adjustment to the CRR in relation to the growth in banks’ deposits.

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In a bid to encourage lending activities, the CBN will enforce a CRR levy of 50 percent on the lending shortfall for banks that fail to meet the minimum Loan to Deposit Ratio (LDR) requirement. This enforcement is in line with the CBN’s previous communication to all banks, referenced BSD/DIR/GEN/LAB/12/049, dated September 30, 2019.

The CBN assures banks that detailed information regarding the applied charges and the computation rationale behind them will be provided to ensure transparency and understanding.

In the circular, the CBN aims to streamline the CRR framework to facilitate better compliance, transparency, and efficiency in the banking sector.

Banks are advised to adapt their systems and procedures accordingly to adhere to the updated Cash Reserve Requirement guidelines.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.