Banks Borrow N9.17 Trillion From CBN in Seven Months as They Become Cash-Strapped
- Nigeria's Central Bank said it gave banks in the country the sum of N9.17 trillion to address liquidity challenge in the sector
- The banks access the money through the CBN's Standing Deposit Facility window in a period of seven months
- The banks borrowed N7.27 trillion through the SFL window in the second quarter of 2021 but brought down their borrowing greatly
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The Central Bank of Nigeria said Deposit Money Banks and Merchant Banks borrowed N9.17 trillion via its Standing Lending Facility window within a period of seven months, figures from the apex bank reveal.
More borrowing from commercial banks
The Punch reports that the banks often use the regulator’s SLF window to access funds if they meet certain criteria so as to address short-term cash needs.
Source: Depositphotos
Lenders also access the CBN’s Standing Deposit Facility window to deposit their surplus cash.
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Economic data gotten from the CBN show that lenders borrowed N7.27 trillion through the SFL window in the second quarter of 2021, but reduced their borrowing greatly.
In October last year, the banks borrowed N503.69 billion from the CBN in October, the reports said.
What the CBN is saying
According to the CBN, the risen level of liquidity was further apparent in the way of trades at the bank’s standing facilities window, as a full request for Standing Deposit Facilities by banks increased by 28.2 per cent to N568.15bn in the review period, while request at the standing lending window dropped significantly to N1.39tn, from N7.27tn in the second quarter of 2021.
Legit.ng reports that Bank loans to government have risen by 22.59 per cent, hitting N2.17tn as of the end of September 2021 from N1.77tn recorded in December 2020.
This represents a N400bn increase within the nine-month period, the Punch reports.
This was contained in the Central Bank of Nigeria report titled, ‘Deposit Money Bank’s sectoral allocation of credit.’
Source: Legit.ng
