The Central Bank of Nigeria (CBN) has announced that interest rate on local currency savings deposits shall be negotiable subject to a minimum of 10% per annum of Monetary Policy Rate.
The apex bank made the disclosure today, September 1, 2020, in a letter to all Deposit Money Banks across the federation.
In the letter referenced BSD/DIR/GEN/LAB/13/052, titled ‘LETTER TO ALL BANKS’ and signed by the Director of Banking Supervision, Bello Hassan, the Central Bank expressed satisfaction over the recent decline in market rates in the banking sector.
The letter reads:
The Central Bank of Nigeria (CBN) has noted with satisfaction the recent declining trend in market rates in the banking sector following the implementation of policies aimed among others, at stimulating credit flow to the real sector.
In line with recent market developments, the Bank has reviewed the minimum interest payable on savings deposits as provided in the Guide of Charges by Banks, Other Financial and Non-Bank Financial institutions issued in December 2019.
Consequently, all deposit money banks are hereby informed that effective from September 1, 2020 interest on local currency savings deposits shall be negotiable subject to a minimum of 10% per annum of Monetary Policy Rate.
This Letter supersedes that of August 31, 2020 referenced BSD/DIR/GEN/LAB/13/051 on the same subject.
The CBN had, in its last letter to banks referenced BSD/DIR/GEN/LAB/13/051 and titled ‘Re: The interest rate on reserve funds store’, requested all Deposit Money Banks to survey loan fees on investment accounts to at least 10 per cent of the Monetary Policy Rate also effective from September 1, 2020.
At the Monetary Policy Committee meeting in July, the apex bank held the Monetary Policy Rate at 12.5 per cent.