The Central Bank of Nigeria (CBN) has directed deposit money banks to review the interest payable on savings deposits downward to a minimum of 10 percent per annum of the Monetary Policy Rate (MPR) as against the 30 percent previously in force with effect from 1st September.
Put differently, the new rate is 1.25 per cent at the current MPR rate of 12.5 per cent.
As gathered by Daily Times, CBN disclosed this in a circular to all banks titled, ‘Re: Interest Rate on Savings Deposit’ issued on Monday and signed by Bello Hassan, its Director of Banking Supervision.
The apex bank said it took the action after noting “with satisfaction 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.”
It went further to say, “In line with 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.
“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 per cent per annum of Monetary Policy Rate.”
In December, the CBN announced a cut in charges for electronic banking transactions as well as a review of other bank charges to align with market development and the inclusion of new sections on accountability and a sanction regime to directly check instances of excess, unapproved and indiscriminate charges.
It retained the MPR at 12.5 percent at the last session of its Monetary Policy Committee in July.