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Thursday, June 8, 2023

Inside details of Bankers Committee Meeting held on Saturday

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The Bankers Committee held a meeting with the Governor of the Central bank of Nigeria (CBN) Godwin Emefiele, over the weekend, and here are some of the inside details, according to MoneyCentral sources familiar with the matter.

  • Banks asked the rational for the unusual cash reserve ratio (CRR) debits, and the fact that they are constraining loan growth.
  • The Governor explained that banks have too much liquidity and instead of assisting the regulator they are facilitating import of items like mayonnaise, tea bag and toothpick.
  • Banks asked the regulator to come out with a list of essential items of import so they will be guided.
  • In the course of discussions, it came out that effective CRR of Stanbic, Rand Merchant Bank and Standard Chartered are 110%, 80% and 150% respectively, as opposed to the 27.5 percent limit.
  • In responding to comments, the Governor asked that Merchant Banks can write and justify why they should release CRR. It should be justified along the following lines – Lowered liquidity ratio, high CRR and pipeline of deals.
  • CBN will do a review of export proceeds inflows and uses. If a customer is yet to receive export proceeds within the stipulated period – 180 days and 90 days for oil and non oil exports- the bank will be debited with 5%.
  • Banks that have allowed export customers to use proceeds for ineligible transactions will be debited for that amount and they can recover from their customers. This will also apply for uses through bills for collection or open account. Banks must support CBN in managing FX.
  • Banks are buying OMO to arbitrage with customers and that is why they cancelled the last OMO bidding. The regulator will investigate this and sanction banks that are culpable.
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