MORE PROBLEMS; Access, UBA, GTB, Other Banks Borrow Over N3trn From CBN in 3 Weeks

Nigerian banks in need of cash have secured over N3 trillion loan from the Central Bank of Nigeria Data from the CBN website showed that the banks’ borrowings happened in three weeks through the Standing Facilities Window Operations The borrowings show reduced liquidity in the banking sector and a sign of non-performing loans

EllaNews journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Deposit money banks and merchant banks borrowed an incredible N3.76 trillion from the Central Bank of Nigeria in the first three weeks of June 2024.

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The banks accessed the borrowings through the CBN Lending Facility.

The Standing Lending Facility (SLF) is a short-term credit from which commercial banks can draw when they need short-term withdrawals from their customers.

Banks’ borrowings from CBN
According to the CBN data, since the start of 2024, Nigerian banks have borrowed at least N57.4 trillion.

This is significantly higher compared to N10.02 trillion in five months of 2023.

Reports say a net SLF indicates liquidity problems in commercial banks due to the central bank’s monetary policy or a symptom of the banks having a lot of non-performing loans.

Experts speak on banks’ borrowings
According to Muda Yusuf, Chief Executive Officer of the Center for Promotion of Private Enterprises (CPPE), the trend reflects the liquidity pressure that certain banks are experiencing.

“The development points to a lack of liquidity on the part of banks. Monetary policy has been tightening and this has led to low liquidity.

“It is cheaper for banks to borrow from the CBN. This development is not positive but negative. We cannot continue to tighten because it will reflect economic growth.”

Bank manager arrested for allegedly stealing N650m

Meanwhile, TrackNews earlier reported the arrest one Mr Adeniyi Talabi, a manager at a branch of a major bank in Osogbo, for allegedly embezzling N650 million from 35 bank customers.

Yemisi Opalola, the police command’s spokesperson, said that Talabi committed the fraud by deceiving the victims and siphoning the funds through an illicit method known as proof of funds.

She mentioned that the bank has suspended Talabi as he and his accomplices will face charges in court once the investigation is concluded.