Banks

There are indications that commercial banks and merchant banks are increasingly depending on the Central Bank of Nigeria for liquidity as their borrowing from the apex bank has intensified in the last eight months of 2023. Aside from August 2023 ending this week, commercial banks and merchant banks borrowed a total of N12.46tn from the CBN during the first eight months of this year, according to the CBN data accessed by our correspondent. The financial institutions had, in the first eight months of 2022, borrowed N6.96tn from the central bank, representing an increase of 79 percent. Commercial banks and merchant banks access lending from the apex bank using the Standing Lending Facility (SLF) window and deposit cash with the apex bank using the Standing Deposit Facility window (SDF). According to findings, banks during the first eight months of 2023 accessed the SLF window against the backdrop of CBN’s tightening monetary policy stance. The apex banking regulating body has the SLF, a short-term lending window for commercial banks and merchant banks to access liquidity to run their day-to-day business operations.

Punch