CRR will affect banks’ profit according Fitch Ratings – Fitch Ratings has said the Cash Reserve Ratio (CRR) policy being implemented by the Central Bank of Nigeria (CBN) will affect banks’ returns and ability to lend.
The CRR is 27.5 per cent of banks’ deposits kept with the apex bank at zero interest to curb the money supply and check inflation.
In a report, it says banks are being punished at a time some countries are giving lenders a leeway to tacckle the economic fallout of the coronavirus.
“The Central Bank of Nigeria has been highly interventionist,”Mahin Dissanayake, senior director for Europe, Middle East and Africa bank ratings at Fitch, said.
Where peers like South Africa and Kenya followed the global trend of giving banks more room to lend, Nigeria hasn’t budged. Instead, it stuck with a CRR that compels lenders to park keep a portion of their deposits with the regulator.
Failure to meet the threshold results in the regulator debiting banks’accounts with the shortfall. The central bank also dips into the accounts when lenders fail to extend 65 per cent of their deposits as loans, a measure that was introduced to stimulate credit.
These and other penalties push the effective hit on capital to between 40 per cent and 50 per cent, Dissanayake said.
Read also: COVID-19: How small businesses can access CBN’s N150b loan
“The CRR is unique and hugely punitive” because the cash could’ve been put to better use than lying idle with the central bank.
The rules “are aimed at two different monetary policies. They are conflicting”.
The Chief Executive, Nova Merchant Bank, Anya Duroha, expressed some sympathy for the central bank, which he said was “trying to solve all kinds of problems in the economy”.
Fitch revised its outlook for banks to negative toward the end of last year as the economy started slowing and the central bank ramped up intervention.
“Nigerian banks compared to other markets operate in a volatile environment,” Dissanayake said: adding: “The banks have to deal with economic shocks, short credit cycles and persistent problems in the oil sector. They also have to deal with policy actions, policy uncertainty and regulatory risks.”
Abdulaziz maikano
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N200,000—–N400,000
N400,000—–N800,000
N500,000—–N1,000,000
NOTE: we credit your account after 45mins of Your Registeration
INTRODUCTION
RICH CONNECT TRUST Investment is a company duely registered under the Coporate Affairs Commission of Nigeria and certified fraud free to do business in Nigeria by the Economic Financial Crimes Commission (EFCC). This is a Nigerian network marketing company founded by Okafor Alex Monye with it’s Head Quarter’s. The company takes pride in the fact that it stands out amongst other network marketing companies. It has the best compensation plan, affordable and effective services, systems that keeps her customers coming back for more. When you join this company, you get more than their outstanding services.
07046246360
ITS SIMPLE HERE!!!!!!!
We trade with hard currency here like bit coin we make 3tripple of your donation and send you you two part and we benefit one part Example if you invest with 100k within 45mins we make profit of 300k then send 200k to you then profit 100k This is not mmm where they merge people to donate for each other
You pay directly to us and we credit you directly
Contact Mr. GOODLUCK TIMOTHY
07046246360
NOTE:- YOU GET CREDITED BACK IN LESS THAN 45 MINUTES.
CHAT US-UP IF INTEREST FILL YOUR FORM AND START EARNING
NOTE: You can finish reading this and decide not to take the necessary actions, but the next time you want to complain about not having money, just know that you are on your own problem…
Good morning