'No more limit' - CBN make changes on Access, GTB, UBA, other banks savings accounts

The Central Bank of Nigeria (CBN)'s decision to remove the limits placed on the Standing Deposit Facility (SDF) is good news for banks.

Before this decision, commercial banks were not allowed to deposit more than N2 billion daily with the CBN.

The SDF is like a savings account for banks at the central bank. Banks can deposit extra money there, and the central bank pays them interest.

It is one of the measures the apex bank uses to control how much money is available in the banking system and influence interest rates.

CBN removes deposit limit

Leadership reports that since the CBN removed the limits on SDF, the net deposits of banks at the CBN window have now soared to N2.3 trillion in October 2023 as against a monthly average net borrowing of N1.4 trillion recorded.

On their part, Access Bank, United Bank for Africa, Zenith Bank, and other commercial banks have been exploring the CBN deposit window to earn more.

Based on the last monetary policy meeting held in July 2023, a deposit on SDF attracts interest at 15.75 per cent with an asymmetric corridor of +100/-300 basis points around the 18.75 per cent rate.

This means more money in interest for the banks as they deposit their excess cash with the CBN.