CBN eliminates the need for daily cash reserve debits from commercial banks

The Central Bank of Nigeria (CBN) has made an announcement regarding the discontinuation of the daily Cash Reserve Requirement (CRR) debits for banks.

This decision was communicated through a circular that was issued on Friday and addressed to all banks.

The purpose of this change is to implement an updated Cash Reserve Requirement (CRR) mechanism that will assist banks in their planning, monitoring, and alignment of records with the CBN.

The circular, titled “Cash Reserve Requirement Framework Implementation Guidelines,” was signed by Dr Adetona S. Adedeji, the Acting Director of the Banking Supervision Department. According to the circular, the determination of the deposits subject to sterilization with the CBN as CRR will follow a specific process.

This process includes two phases: the utilization of the Incremental Approach and the enforcement of a CRR levy for banks that do not meet the minimum Loan to Deposit Ratio (LDR). The CBN will provide banks with the details of the charges applied and the rationale behind their computation.