Some shareholders have called for the reduction of banks’ mandatory Cash Reserve Ratio (CRR).
One of them and the founder of the Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, urged the apex bank to reduce the CRR to 15% from 27.5% or pay interest on the restricted deposits to the banks, noting that the banks had over N12 trillion restricted deposits with the Central Bank of Nigeria (CBN).
Nwosu, according to NAN, explained that the decision by the apex bank to review most bank charges and fees downward, coupled with the hike in the CRR, amid expectations of increasing regulatory headwinds, was currently causing a setback in the sector.
CRR is a monetary policy tool used by the Central Bank of Nigeria (CBN) to control money supply in the economy.
The CRR empowers the central bank to sequester up 27.5% of customer deposits held by commercial banks, effectively restricting the banks from accessing the money.
The apex bank debited a chunk of deposits of banks since 2019 as part of a mutually inclusive CRR and Loan to Deposit Ratio policy that targeted at driving lending more to private sector.
He said, “It is noteworthy that Nigeria has the highest reserve requirement in sub-Saharan Africa. South Africa, Kenya and Ghana all have CRR’s of below 10 per cent.
“We believe the elevated CRR level moderated the industr