Regulatory Alerts2009-03-17 | TED-FEM-FPC-GEN-01-035-09Circular on Update to the CBN Lending Windows
The Central Bank of Nigeria (CBN) has clarified its lending windows to ensure the banking system remains liquid amidst the global economic crisis. The Standing Lending Facility (SLF) is open to all deposit money banks (DMBs) and discount houses (DHs), with an interest rate set at the CBN's Monetary Policy Rate (MPR). The Repurchase (REPO) window is also accessible for up to 90 days, with rates benchmarked to the CBN MPR plus appropriate basis points. The Expanded Discount Window (EDW) has been extended to include non-FGN securities as collateral, such as state government bonds and commercial papers. Institutions accessing these facilities are prohibited from simultaneously lending in the interbank money market to prevent arbitrage opportunities. Sanctions for violations range from denial of access to the CBN window to forfeiture of profits and temporary suspensions.