Godwin Emefiele, new CBN governor has stopped all charges on customer cash deposits as part of his agenda as governor of the apex bank in Nigeria. He also revealed that interest rate will be reduced gradually, to encourage investment, as more money will be available in the hands of investors.
Speaking to journalists at the CBN head office in Abuja on Thursday, 6th of June, he listed the reduction of interest rate and removal of deposit charges as major items in his agenda as governor, stating that Nigeria has the highest treasury bill rates compared to other emerging market economies of the world. And that, “such high rates create a perverse incentive for commercial banks to simply buy virtually risk-free government bonds rather than lend to the real sector,” as a result accessing loan is not usually easy for the people who really need it.
He also stated that though it would not be a smooth ride, the Central Bank would commit to working hard in collaboration with all stakeholders to formulate strong measures to accomplish the objectives, and sustain them.
This new development has been greeted with general approval, as there would be less complaints by customers regarding unwarranted deposit charges, and with the planned gradual reduction of interest rate, there will be encouragement for private investment, both in the SME sector, and other sectors of the nation’s economy.
However, while charges on deposits have been proscribed, Emefiele said, “charges on withdrawals remain sustained at the current 3% for individual transactions exceeding ₦500,000 and 5% for corporate transactions exceeding ₦3,000,000.