BREAKING NEWS

CBN To Banks - Stops Sales Of Treasury Bills’ To Individuals

Top Stories
Typography

Nigeria's apex bank, Central Bank of Nigeria (CBN) has given a directive to Deposit Money Banks (DMBs) and other financial institutions in Nigeria to stop the sale of treasury bills to individuals and small firms with effect from November 29, 2019.

 

According to some Banks officials who pleaded for anonymity, only big corporate organisations would be allowed to do treasury bills investments. As such, DMBs have commenced notifying their customers on the new development.

However, the existing treasury bills investments would be allowed to continue until the end of their maturity dates.

Also, the officials disclosed that operators are trying to see if the November 29 deadline given for the implementation by the CBN could be extended, so as to create enough awareness.

But there is no move for the reversal of the directive.

Most importantly, the inaccessibility of treasury bills might lead to an increase in savings deposits of the banks, attracting interest rates below what the treasury bills offered.

Notwithstanding, the move was to stop the mop-up of funds from the system through the treasury bills.

Additionally, many people with huge cash prefer to keep their funds idle in treasury bills instead of investing the funds.

Some people collect huge severance package, have huge funds but they have refused to invest the money.

It was gathered that the directive by the CBN is meant to ensure funds are useful in the economy so that they will be available in the banks and can be invested to create more jobs in the country.

To cushion the effect that may likely arise from this development, CBN increased the Loan to Deposit Ratio of the banks from 60 per cent to 65 per cent.

BLOG COMMENTS POWERED BY DISQUS