By Munachimso Obienyi
The Bank Directors Association of Nigeria (BDAN) has said payment of deposit insurance premium on the funds sterilised at the Central Bank of Nigeria as Cash Reserve Ratio (CRR) is impacting on the profitability of the banks.
They spoke at BDAN’s annual summit in Lagos.
They said the continued payment of deposit insurance levy by banks to the Asset Management Corporation of Nigeria, the Nigeria Deposit Insurance Corporation, and some other regulations were threats to the industry.
The President, BDAN, Mustafa Chike-Obi, called for an end to the huge sum paid to the regulators for money that had been sterilised by the CBN as CRR, adding that this could save banks close to N50bn.
He said, “Why do banks pay deposit insurance on money that has been sterilised at the CBN as CRR. If the cash reserve ratio has been sterilised by the CBN, there is no reason to insure it at a minimum, all discretionary normal CRR that are at CBN should not be subjected to the calculation of deposit insurance. This is a saving close to N50bn. BDAN is the forum to advocate and banks should take us seriously
