The Central Bank of Nigeria (CBN) has withdrawn the sum of N118 billion from the accounts of some banks for falling short of the cash reserve requirement (CRR) as well as the stipulated loan to deposit ratio (LDR).
About 20 commercial banks were affected by the CBN sanction.
“The accounts of about 20 banks were debited on Friday. The CBN does weekly maintenance and once any bank is not meeting up with the stipulated CRR and LDR, it sterilises their cash,” a report first published by Thisday quoted a in the apex bank as saying.
It stated that “This is also part of the CBN’s liquidity management process as well as efforts to prevent banks with excess naira liquidity from forex speculation, the source added.
“Liquidity management involves the supply or withdrawal from the market the amount of liquidity consistent with a desired level of short-term interest rates or reserve money.
“The central bank last week adjusted the exchange rate at the Secondary Market Intervention Sales (SMIS) to N380/$1. The rate was formerly N360/$1.
“CBN Governor, Mr. Godwin Emefiele, recently said there was “ample liquidity buffers for the sector, even with the over N10 trillion maintained today in the cash reserve balances of the CBN,” the report said.
