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CBN bars debtors from buying treasury bills

FOREX INFRACTIONS: CBN to send EFCC after rogue banks, companies

The Central Bank of Nigeria (CBN) on Thursday ordered the cancellation of requests for purchase of Treasury Bills at the Primary or Open Market Operation (OMO) auctions by borrowing customers of such banks or those of other banks.

The directive is part of the apex bank’s effort at increasing access to funds for players in the real sector of the economy.

The regulator had ordered all Deposit Money Banks (DMBs) to increase their Loan to Deposit Ratio (LDR) to a minimum of 60 percent by the end of September. The LDR was later reviewed upwards to 65 percent.

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According to a stockbroking firm, CSL Stockbrokers, the CBN’s action will result in a  further build-up of non-performing loans (NPLs) in the medium and long term because of the “sluggish growth” of the nation’s economy.

The firm added that the apex bank’s directive would squeezed banks’ margins and worsen their capital positions.

In the short term, CSL Stockbrokers suggested a decline on yield on loans as banks push more loans to customers at lower yields in a bid to meet the CBN requirement.

Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
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Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
www.ripplesnigeria.com

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