By Tony Obiechina, Abuja
The Central Bank of Nigeria, CBN, on Monday lifted the suspension on lending to banks through its Standing Lending Facility, SLF, adjusting the lending rate to 31.75 percent interest rate.
CBN also said that commercial and merchant banks would earn a 19 percent interest rate on deposits above N3 billion in its Standing Deposit Facility (SDF).
The apex bank disclosed this in a circular signed by its Director Financial Market Department, Dr. Omolara Duke.
Explaining the reason behind the SLF rate, the apex bank said that the direction was based on the decision of the Monetary Policy Committee (MPC) adjusting the upper corridor of the standing facilities to 5.00 per cent from 1.00 per cent around the Monetary Policy Rate, MPR, at its 296th meeting.
CBN said: “The Monetary Policy Committee (MPC) adjusted the upper corridor of the standing facilities to 5.00 per cent from 1.00 per cent around the MPR, at its 296th meeting.
“Consequently, the suspension of the Standing Lending Facility (SLF) is hereby lifted and Authorised Dealers should send their request for SLF through the Scripless Securities Settlement System (S4) within the operating hours of 5.00pm to 6.30pm.
“To this end, Authorised Dealers are permitted to access the SLF at 31.75 per cent; Permitted to access Intraday Lending Facility,ILF, to avoid system gridlock at no cost if repaid the same day;
“The 5.00 per cent penalty (as stated in the S4 business rules) is retained, for participants that do not settle their ILF, which the system will convert to SLF at 36.75 per cent;
“Collateral execution (the rediscounting of instruments pledged by participants at the penal rate by CBN) is reintroduced as stipulated in the approved repo guidelines. “The circular takes immediate effect.”
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“The Standing Lending Facility was adjusted to 31.75 percent while the Standing Deposit Facility to 25.75 percent.
“The adjustment of the SDF will be operationalized as follows: Commercial and Merchant Banks 25.75% for deposits up to N3.00 billion; 19 percent for excess deposits above the initial N3.00 billion.
“Payment Service Banks 25.75 percent for deposits up to N1.50 billion; 19.00 percent for excess deposits above the initial N1.50 billion”. READ ALSO:
