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No More Limit: CBN Makes Changes on Access, GTB, UBA, Zenith, Other Banks' Savings Accounts
Money

No More Limit: CBN Makes Changes on Access, GTB, UBA, Zenith, Other Banks' Savings Accounts

by  Dave Ibemere 2 min read
  • The CBN continues to make policy adjustments as it seeks to enhance the efficiency of its policies
  • The latest decision involves removing limits on the SDF window for Access, GTB, UBA, and other banks
  • Banks are now able to earn more from their excess cash through the Standing Deposit Facility (SDF)

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Dave Ibemere has over a decade of experience covering tech, energy, stocks, investments, and the economy

The Central Bank of Nigeria (CBN)'s decision to remove the limits placed on the Standing Deposit Facility (SDF) is good news for banks.

Before this decision, commercial banks were not allowed to deposit more than N2 billion daily with the CBN.

Banks makes more money
Banks deposit with CBN using SDF and make interest Photo credit: CBN
Source: Facebook

The SDF is like a savings account for banks at the central bank. Banks can deposit extra money there, and the central bank pays them interest.

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It is one of the measures the apex bank uses to control how much money is available in the banking system and influence interest rates.

CBN removes deposit limit

Leadership reports that since the CBN removed the limits on SDF, the net deposits of banks at the CBN window have now soared to N2.3 trillion in October 2023 as against a monthly average net borrowing of N1.4 trillion recorded.

On their part, Access Bank, United Bank for Africa, Zenith Bank, and other commercial banks have been exploring the CBN deposit window to earn more.

Based on the last monetary policy meeting held in July 2023, a deposit on SDF attracts interest at 15.75 per cent with an asymmetric corridor of +100/-300 basis points around the 18.75 per cent rate.

This means more money in interest for the banks as they deposit their excess cash with the CBN.

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Legit.ng earlier reported that the FCCPC gave loan apps five days to prove that they operate within the set guidelines governing the industry or be deleted and sanctioned.

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The commission said compliance with its rules was mandatory, and failure to adhere constitutes a violation of the law.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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