CBN fines 10 lenders N7.02trn for CRR breach

In 2021, the Central Bank of Nigeria (CBN) deducted N7.02 trillion from ten banks for failing to fulfil the 27.5 percent Cash Reserve Requirement (CRR) standard.

The apex bank debited these banks N6.71 trillion in 2020 for failing to achieve its monetary requirement, according to audited financial filings.

The CRR is the minimum amount that banks and merchant banks are required to keep with the CBN from customer deposits; it bears no interest and is not available for banks to employ in their daily operations.

The top bank’s Monetary Policy Committee (MPC) boosted CRR by 5%, from 22.5 to 27.5 percent, in early 2020, with the goal of addressing monetary-induced inflation while maintaining its 65 percent Loan Deposit Ratio (LDR) policy.

Regulations imposed by the CBN compel banks to keep up to 27.5 percent of their deposits in CRR, which means the deposits cannot be used for loans or advances.

Access Bank Plc, Guaranty Trust Bank (GTBank), United Bank for Africa (UBA) Plc, FCMB group, and Sterling Bank Plc are among the financial institutions involved. Union Bank of Nigeria Plc, Stanbic IBTC Holdings Plc, Fidelity Bank Plc, and Zenith Bank Plc are the other financial institutions.