The Central Bank of Nigeria (CBN) has announced the removal of the suspension on lending to banks via its Standing Lending Facility (SLF), with the lending rate now set at 31.75 percent.

Additionally, the CBN stated that commercial and merchant banks will receive a 19 percent interest rate on deposits exceeding N3 billion in its Standing Deposit Facility (SDF).

This information was communicated in a circular signed by Dr. Omolara Duke, the Director of the Financial Market Department.

The CBN clarified that the adjustment to the SLF rate was influenced by the Monetary Policy Committee's (MPC) decision to raise the upper corridor of the standing facilities from 1.00 percent to 5.00 percent above the Monetary Policy Rate (MPR) during its 296th meeting.

The Central Bank of Nigeria (CBN) announced that during its 296th meeting, the Monetary Policy Committee (MPC) raised the upper limit of the standing facilities to 5.00 percent from 1.00 percent in relation to the Monetary Policy Rate (MPR).

As a result, the previous suspension of the Standing Lending Facility (SLF) has been lifted, and Authorized Dealers are now required to submit their SLF requests via the Scripless Securities Settlement System (S4) between 5:00 PM and 6:30 PM.

Furthermore, Authorized Dealers are allowed to utilize the SLF at a rate of 31.75 percent and can access the Intraday Lending Facility (ILF) at no charge, provided it is repaid on the same day to prevent system congestion.

It is important to note that a 5.00 percent penalty, as outlined in the S4 business rules, will apply to participants who fail to settle their ILF, which will subsequently be converted to SLF at a rate of 36.75 percent.

The reintroduction of collateral execution, which involves the rediscounting of instruments pledged by participants at the penal rate by the Central Bank of Nigeria (CBN), is in accordance with the approved repo guidelines. This change is effective immediately.

In a circular addressed to Commercial, Merchant, and Payment System Banks regarding the Standing Deposit Facility (SDF), the CBN stated that, in line with sections 12 and 30 of the CBN Act 2007, the Monetary Policy Committee (MPC) has modified the Asymmetric Corridor to +500/-100 basis points from the previous +100/-300 basis points surrounding the Monetary Policy Rate (MPR).

The Standing Lending Facility has been set at 31.75 percent, while the Standing Deposit Facility is now at 25.75 percent.

The implementation of the SDF adjustments will be as follows: Commercial and Merchant Banks will receive 25.75% for deposits up to N3.00 billion and 19 percent for any excess deposits beyond that threshold.

For Payment Service Banks, the rate is 25.75 percent for deposits up to N1.50 billion and 19.00 percent for excess deposits above this amount.