Access, GTB, FCMB, Sterling Bank, Union Bank, others loses N7trn over CRR

Ten banks have lost N7.2tn for failure to meet the 27.5 per cent Cash Reserve Requirement threshold.

The Central Bank of Nigeria in 2021 debited the 10 banks N7.2tn, according to audited financial statements of the banks.

The CRR is the minimum amount banks are expected to retain with the CBN from customer deposits. It carries no interest and is not available for use by the banks.

The banks are Union Bank of Nigeria Plc, Stanbic IBTC Holdings Plc, Fidelity Bank Plc, and Zenith Bank Plc.

Others are Access Bank Plc, Guaranty Trust Bank, United Bank for Africa Plc, FCMB group and Sterling Bank Plc.

THISDAY reports that the 2012 audited accounts revealed that, Access Bank, followed by Zenith bank suffered the highest debits in 2021, among other 10 banks, while Sterling bank suffered the lowest debit.

Access bank and Zenith bank are the top two banks in terms of customer deposits.

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Access Bank reported 12 per cent increase in restricted deposits with CBN in 2021 totaling N1.47tn, while Zenith Bank reported a decline of 6.05 per cent to N1.25trillion CRR deposit with CBN.

GTBank, the banking subsidiary of Guaranty Trust Holding company reported N953bn CRR debit with CBN.

The Group in its 2021 audited results explained that… “The GTBank Nigeria had restricted balances of N953,040,540,000 with the CBN as at 31 December 2021 (December 2020: N1,008,748,051,000). This balance is CBN cash reserve requirement. The cash reserve ratio represents a mandatory total Naira deposit which should be held with the Central Bank of Nigeria as a regulatory requirement.”

The group in its 2021 investors/analysts’ presentation noted that CRR closed at N9523 bn in 2021 from N1tn in 2020, resulting in effective CRR ratio of 37 6per cent from 44 33per cent in 2020 (with Special Bills, CRR closed 59 7 per cent).

Other banks are, Fidelity Bank with N686.1bn CRR debit from CBN in 2021 as against N540.13bn in 2021; Wema Bank grew its CRR debit to N313.8bn in 2021 from N246.97bn in 2020; FCMB Group closed 2021 with N309.63bn CRR debit with CBN from N289.14bn in 2020 and Sterling Bank reported N243.87bn mandatory reserve deposits with CBN from N228.79bn in 2020.

Speaking with THISDAY, the Vice President, Highcap Securities Limited, Mr David Adnori, said the apex bank is using CRR to control inflation, stressing that the introduction of CRR is a drastic monetary policy targeted at controlling money supply in the banking system.

He said, “If CBN fails to maintain its CRR policy, so much money will flow into the market and further deprecates naira. Generally, the policy has not favoured banks because the fund is not yielding any interest and of no benefit to the productive sector.”