CBN Reduces Savings Account Interest Rate From 3.9% To 1.25%
The Central Bank has mandated all banks operating in Nigeria to review interest rates on savings deposits to a minimum of 10 per cent of the Monetary Policy Rate effective from September 1, 2020.
This would amount to 1.25 per cent at the current MPR of 12.5 per cent .
The apex bank in a letter to the banks signed by Director of Banking Supervision, Central Bank of Nigeria, Bello Hassan said the new minimum interest will be effective September 1, 2020.
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 2019.
“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 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.
