SDF: CBN Makes Changes To Access, UBA, GTB, Zenith, Other Banks Deposit Account

• The CBN has announced changes to the commercial bank's Standing Deposit Facility (SDF), which earns them interest
• In the new rate, United Bank for Africa, Guaranty Trust Bank, and Zenith Bank will all fixed SDF rate of 26.50%
• The change is part of the resolutions from the 298th meeting of the Monetary Policy Committee (MPC)

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria (CBN) has introduced a single-tier remuneration structure for its Standing Deposit Facility (SDF), which applies to commercial banks' large deposits exceeding N3 billion.

A Standing Deposit Facility (SDF) is a financial instrument central banks employ to regulate liquidity within the economic system.

Banks with excess liquidity can deposit these funds with the central bank using the SDF. The central bank, in turn, provides interest on these deposits.

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CBN message to banks

In a circular addressed to United Bank for Africa, Zenith, Access, Guaranty Trust Bank and other commercial banks, CBN said the Sanding Deposit Facility (SDF) will now be 26.5%.

This represents a sharp increase from the previous 19%.

The policy change was communicated through a circular issued by Omolara O. Duke, Director of the Financial Markets Department.

The circular instructed all authorised financial institutions to acknowledge and implement the updated structure, which supersedes the previous framework, Punch reports.

It reads:

"At the 298th meeting of the Monetary Policy Committee (MPC), the committee retained the asymmetric corridor at +500/-100 around the MPR and removed the 2nd tier of the standing deposit facility (SDF) of 19% on deposits above N3 billion.

The SDF will now be remunerated on a single-tier basis, which is currently the monetary policy rate (MPR) minus 100 basis points. Consequently, all SDF will be remunerated at the prevailing SDF rate of 26.50%. This circular supersedes the earlier circular on the asymmetric corridor indicated below:

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Superseded circular: Ref: FMD/DIR/PUB/CIR/001/017, dated August 26, 2024 Subject: Operationalisation of the standing deposit facility (SDF) symmetric corridor

All authorised dealers are required to take note of this new development. This circular takes immediate effect."

10 banks deposit over N150bn in taxes to government account

Legit.ng earlier reported ten commercial banks operating in the country contributed over N155 billion in income tax payments to the coffers of the federal government of Nigeria.

The amount marks a significant increase of 33.50% from the N116.54 billion paid by the banks during the previous fiscal year, as reported by their financial statements submitted to the Nigerian exchange.

The ten banks that made the list include Zenith Bank, GTCO, UBA, Stanbic IBTC Holdings, FCMB, Fidelity Bank, Sterling Bank, Wema Bank, Unity Bank, and Jaiz Bank.

Source: Legit.ng