Effective from today, Thursday, banks and discount houses operating in the country are to limit their daily access to the Central Bank of Nigeria (CBN’s) Standing Deposit Facility (SDF) to only N2billion or risk not being remunerated.
A CBN Circular to all banks, yesterday, with reference number: FMD/DIR/CON/ONG/12/2019, titled: RE: Guidelines on Accessing the CBN Standing Deposit Facility,” directed that banks shall not exceed the stipulated limit. By this decision, it then means that banks can seek comfort in other deposit banks if they want to access more than the set N2billion. SDF is the sum normally kept with the CBN in liquidity surplus conditions, which gives the apex bank a window to intervene in the inter-bank market.
The decision followed a further review of an earlier directive in five years ago, vide another circular, referenced: FMD/DIR/GEN/CIR/)05/020, dated November 6, 2014. The new Circular signed by the CBN Director, Financial Markets Department, Dr. Angela Sere-Ejembi, reads in part: “The remunerable daily placements by banks at the SDF shall not exceed N2billion.
“The SDF deposit of N2billion shall be remunerated at the interest rate prescribed by the Monetary Policy Committee from time to time,” and warned that, “Any deposit by a bank in excess of N2billion shall not be remunerated.”