About 28 commercial and merchant banks operating in Nigeria have been fined a total of N1.4 trillion by the industry watchdog, the Central Bank of Nigeria (CBN).
A report by Reuters on Friday said the affected financial institutions were levied based on issues surrounding cash reserve ratio (CRR).
However, it was pointed out that the total amount deducted from the CRR of the affected lenders was more than 27.5 percent target set for them.
Recall that in January 2020, the apex bank raised the CRR by 500 basis points to 27.5 percent. This was the first rise in four years and the action was taken to curb excess liquidity in the banking system, which the CBN said was contributing to inflation.
From the deductions, Zenith Bank had the highest amount, N355.95 billion, followed by First Bank with N208.1 billion.
Also, Standard Chartered Bank was charged N120.65 billion, while Stanbic IBTC had N143.97 billion deducted from its reserves with the central bank.
This is not the first time in recent times the CBN is levying banks for regulatory issues. Last year, after it asked lenders to increase their loan-to-deposit ratio (LDR) to 60 percent by end of September, the CBN fined erring banks nearly N500 billion.
The central bank has been coming up with policies to improve lending in the country, which it expects to boost the economy, which before now had been struggling to fully recover from the 2016 recession.
While the recovery process was going on, the coronavirus pandemic and the crashing of crude oil prices at the global market has dented efforts of both local fiscal and monetary authorities at getting the economy back on its feet.