CBN Reduces Interest Rate on Savings Deposited In Banks

The Central Bank of Nigeria (CBN) has reduced the interest rate on savings in banks to reflect market development in Nigeria following declining trend in market rates. The CBN reviewed the interest rate in line with the monetary policy rate.

According to a statement from the CBN seen by Gistlover, the interest on local currency savings deposits shall be negotiable subject to a minimum of 10 percent per annum of monetary policy rate. The new minimum interest will be effective September 1, 2020.

The directive was issued to banks, other financial and non-bank financial institutions in the statement signed by the CBN Director of Banking Supervision, Bello Hassan. The new policy is, however, confusing as the CBN made reference to a guideline issued in December 2020 – currently, the world is in September 2020.

“The Central Bank of Nigeria 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,” the letter read.

“In line with the recent market developments, the bank has reviewed the minimum interest payable on savings deposits as provided in its guide to charges by banks, other financial and non-bank financial institutions issued in December 2020.

“Consequently, all deposit money banks are hereby informed that effective September 1, 2020, interest on local currency savings deposits shall be negotiable subject to a minimum of 10 percent per annum of monetary policy rate.”