Fear mounts over banks’ deposit decline amid Naira scarcity

DAILY POST

Nigerian banks’ Standing Deposit Facility has declined by 18 per cent to N2.4 trillion in November from N2.94 trillion in October amid cash scarcity.

Also, banks’ Standing Lending Facility, SLF, increased month-on-month by 559 per cent to N376.64 billion in November from N57.14 billion in October this year, raising fear of liquidity in the country’s financial sector.

DAILY POST gathered these details from the Central Bank of Nigeria’s financial data for November 2023.

Although the apex bank, in a statement on December 11, assured that Nigerian banks remain resilient, the 18 per cent decline in the banks’ Standing Deposit Facility and increase in the Standing Lending Facility have raised concerns.

The decline in banks’ SDF is not unconnected to the drop in cash deposits resulting from the persistent Naira scarcity.

As a solution, CBN suspended processing fees on large cash deposits.