According to a report in the Cable, the minimum interest payable on savings deposited in banks across the country will be at least 10 percent per annum of the monetary policy rate.
In an August 31 letter to deposit money banks signed by Bello Hassan, director of banking supervision, the Central Bank of Nigeria said the new minimum interest will be effective September 1, 2020.
With MPR at 12.5 percent, this new directive means that the interest rate on savings deposits will go from 3.9 percent to 1.25 percent.
Hassan, in the letter, said the directive is in line with recent market developments
“The Central Bank of Nigeria has noted with satisfaction the recent 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,” the letter read.
“In line with the 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 2020.
“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 percent per annum of the monetary policy rate.”
The policy direction of the CBN, in recent times, has been geared towards encouraging credit to the real sector to the economy.
The apex bank is targeting improved credit to the real sector to stimulate economic activities which will lead to job creation and economic growth.