Compliance officers sweat as banks suffer another N226 billion in CRR debits

EXECUTIVE Compliance Officers (ECO) and Chief Compliance Officers (CCO) of Deposit Money Banks (DMBs) are not finding it easy as their various institutions keep suffering regulatory penalties.

The latest is that some lenders have again collectively suffered a debit of N226 billion in compliance with the Cash Reserve Requirements (CRR) fixed by the Central Bank of Nigeria (CBN).

The responsibility of ECOs and CCOs of deposit money banks is to ensure that the banks comply at all times to regulatory guidelines.

Industry sources said the debit occurred in the week ended November 20, 2020. This follows a whopping N917.5 billion debit recorded a month ago.

In its September monetary policy communique, the bank claimed its policy measures have led to increased lending in the economy, emphasizing the need to double down on it.

“The Differentiated Cash Reserves Requirement (DCRR) and the minimum Loan-to-Deposit Ratio (LDR), have ensured a significant stream of credit to the real economy. As of end-August 2020, aggregate bank credit had risen by about N3.7 trillion relative to its level in May 2019, when the LDR policy was introduced. The outlook for credit to the economy remains positive given that these policies are still in place and, importantly, that the banking industry continues to be resilient.”

Records show that out of the N226 billion debited for November 2020; top five banks in Nigeria bore the biggest brunt, with a combined debit of N137.5 billion, implying that the top five banks accounted for 60.8 per cent of the total debit for this month.

The breakdown of the debit for the top five banks are; GT Bank (N59.5 billion), Zenith Bank (N30 billion), FBN (N20 billion), Access (N18 billion), and UBA (N10 billion).

CBN had earlier increased the CRR in January by five per cent to 27.5 per cent to address monetary-induced inflation, whilst retaining the benefits from it’s LDR policy.

CRR is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is set according to the guidelines of the central bank of a country.

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