Oyogist has learned that Some shareholders have urged the Nigerian Central Bank to reduce banks’ mandatory Cash Reserve Ratio (CRR).
One of the shareholders who called for the reduction, a member of the Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, urged the apex bank to reduce the CRR to 15% from 27.5% or pay interest on the restricted deposits to the banks, noting that the banks had over N12 trillion restricted deposits with the Central Bank of Nigeria (CBN).
Nwosu, according to NAN, explained that the decision by the apex bank to review most bank charges and fees downward, coupled with the hike in the CRR, amid expectations of increasing regulatory headwinds, was currently causing a setback in the sector.
What Is CRR
CRR is a monetary policy tool implemented by the Central Bank of Nigeria (CBN) to control money supply in the economy.
The CRR empowers the central bank to obtain up to 27.5% of customer deposits held by commercial banks, effectively restricting the banks from accessing the money.