By Munachimso Obienyi
Following the recent changes in the Monetary Policy Rate (MPR) by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), bank customers across the nation have continued to express their concern as Deposit Money Banks (DMBs) have begun revising interest rates on savings account of bank customers.
The apex bank, had increased the benchmark MPR from 14 percent to 15.5 percent, the third time in four months, in its quest to tame inflation. The MPR is the interest rate set by the CBN upon which all other rates especially lending, in the financial market are based with significant mark ups.
Whilst explaining the reasons behind the hike, the apex bank at a post-MPC meeting via Zoom told newsmen that the overall objective is in the interest of the economy. The Director Banking Supervision Department at CBN, Haruna Mustapha, said;
“what we are expecting to see is to rein in inflation and the banking system is a veritable channel for the transmission of monetary policy and like I said, banks will get more income in terms of interest income and indeed based on the numbers that we shared at yesterday’s meeting interest income have continued to go up for understandable reasons and this will have a positive impact on banks bottom line.
“Also interest on government securities and so on will also go up which will also add to banks non- interest income which is also another income line.”
According to him, the interest rates on savings account will also be increased from 10 per cent of MPR to 30 per cent of MPR as from September this year.
Mustapha said, “So we expect to see banks fully complying and our examiners, as part of our routine examinations on banks will check to ensure that all banks comply’’.
Investigations done by NwafoLive reveal that banks have started complying as it stumbled on a notification from Access Bank Plc. The notification read, “Following the recent changes on the MPR, the interest rate on savings account has been revised. The new rates are effectively immediately. Thank you for choosing Access Bank”.
However, some bank customers who spoke to NwafoLive, noted that while the raise is expected to revive savings culture, it is expected to raise the rates of borrowing and customers may stop taking loans from the banks.
Mr Ikenna Nwabune, a customer of one of the new generation banks and a businessman said;
“Even the CBN mentioned that it will be a bitter-sweet experience, so I do not need to say much other than the fact that the raise in MPR will result in banks increasing their interest rates on loans and this will make most customers especially shy away from borrowing”.
