Regulatory Alerts2024-02-02 | BSD/DIR/PUB/LAB/016/027Cash Reserve Requirement (CRR) Framework Implementation Guidelines
The Central Bank of Nigeria (CBN) is implementing an updated Cash Reserve Requirement (CRR) mechanism to improve banks' planning, monitoring, and record-keeping abilities. The new process involves two phases: the incremental approach, which applies existing ratios to weekly average adjusted deposit increases, and a CRR levy for banks that fail to meet the minimum Loan to Deposit Ratio (LDR). The CBN will provide detailed information on applied charges and calculations to banks.
Central Bank of Nigeria Banking Supervision Department Plot 33, Abubakar Tafawa Balewa Way Central Business District P.M.B 0187, Garki, Abuja - Nigeria.
Email: bsd@cbn.gov.ng Website: www.cbn.gov.ng Phone: +234 700-225-5226, +234 800-225-5226 BSD/DIR/PUB/LAB/016/027 February 2, 2024 LETTER TO ALL BANKS CASH RESERVE REQUIREMENT FRAMEWORK IMPLEMENTATION GUIDELINES The Central Bank of Nigeria (CBN) is ceasing daily CRR debits and will be adopting an updated Cash Reserve Requirement (CRR) mechanism that is intended to facilitate your capacity for planning, monitoring, and aligning your records with the CBN.
The determination of the segment of deposits subject to sterilization with the CBN as CRR will follow the processes outlined below: Phase 1 - Utilization of the Incremental Approach: The extant ratios (commercial banks 32.5% and merchant banks 10%) will be applied to increases in the banks' weekly average adjusted deposits.
Phase 2 - CRR levy of 50% of the lending shortfall will be enforced for banks that do not meet the minimum Loan to Deposit Ratio (LDR) as per our correspondence to all banks referenced BSD/DIR/GEN/LAB/12/049 dated September 30, 2019.
The CBN will provide your bank with details of the applied charges and their underlying computation rationale.
Yours Sincerely, DR. ADETONA S. ADEDEJI AG. DIRECTOR, BANKING SUPERVISION DEPARTMENT