Categories: Economy

CBN Cuts Interest Rate On Savings Deposits To 1.25%

The Central Bank of Nigeria (CBN) has directed deposit money banks in Nigeria not to pay less than 1.25% in interest on savings deposit accounts.

According to a circular signed by the financial regulator’s Director of Banking Supervision, Bello Hassan, on Tuesday, the implementation will take effect on September 1, 2020.

The circular stated that the bank is satisfied with the recent declining trend in market rates in the banking sector following the implementation of policies aimed at stimulating credit flow to the real sector.

It added that the interest rate will be negotiable, subject to a minimum of 10% per annum of Monetary Policy Rate., which serves as the apex bank’s benchmark rate for lending in the financial services sector which is at 12.5%

“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’ consequently reviewing rates to 10% of Monetary Policy Rates.

“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 annum of Monetary Policy Rate,” the circular read in part.

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