TUE, SEPT 01 2020-theG&BJournal- The Central Bank of Nigeria has directed all deposit money banks in the country to set interest on local currency savings deposits to a minimum of 10% (per annum) of Monetary Policy rate (MPR), effective September 1, 2020.
This directive effectively tightens the band savers can negotiate on their savings. In other words, they cannot get less than 10% or more than 12.5% (MPR) on their savings.
Analysts say the CBN needs to be clearer with the portion of the circular which reads “10% per annum of Monetary Policy Rate,’’ because that is seemingly meaningless.
In any case, even if the CBN intended to say 10% ‘’of’’ MPR, then any rate above 1.25% (current rate with the new circular) would still be in line with the circular, including rate as high as 20%.
The apex bank issued the directive in a circular published today. The circular reads: ‘’It has noted with satisfaction the recent declining trends in market rates in the banking sector following the implementation of policies aimed at amongst others, at stimulating credit flow to the real sector.
‘’In line with recent market development the bank has reviewed the minimum interest payable on savings deposits as provided in its guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions issued in December 2019.’’
The CBN said this circular supersedes that of August 31, 2020.
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