The Central Bank has ordered all Deposit Money Banks to review interest rates on savings accounts 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.
It disclosed this in a circular with the number, BSD/DIR/GEN/LAB/13/051 to all banks which was obtained on Monday. The circular was titled ‘Re: Interest rate on savings deposit’.
At the last Monetary Policy Committee meeting in July, the apex bank had retained the MPR at 12.5 per cent.
The CBN’s letter to the banks read, “The Central Bank of Nigeria has noted with satisfaction 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.
“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, other financial and non-bank financial institutions issued in December.
“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 cent per annum of Monetary Policy Rate”
In an earlier circular number FPR/DIR/GEN/CIR/07/042 entitled, “Re: Charges to all banks, other financial and non-bank financial institutions,” issued in December 20, 2019, the CBN reviewed bank charges to align with market developments.
Section 1 on interest on deposits on savings accounts stipulated, “Minimum of 30 per cent of MPR p.a (Not payable if a customer makes more than four withdrawals in a month).