ABUJA, Nigeria – The Central Bank of Nigeria, CBN, has directed banks to lift the post-no-debit restriction placed on the accounts of 440 individuals and companies.
The directive was signed by A.M. Barau, acting on behalf of the CBN director of banking supervision, on Tuesday, July 25, 2023.
Banks have been instructed to inform the concerned customers of this development.
Among the listed companies affected by this action are Bamboo Systems Technology Limited, Escale Oil & Gas Limited, Rise Vest Technologies Limited, Chaka Technologies Limited, abokiFX Limited, Nairabet International, Northwood Energy Services, and Proport Marine Limited.
The circular issued by the CBN read, “You are hereby directed to vacate the Post-No-Debit restriction placed on the accounts of the under-listed bank customers at our instance. You must also inform the concerned customers of the vacation accordingly.” The CBN did not, however, specify the reason behind this action.
Post-no-debit restrictions mean that all debit transactions, including ATM withdrawals and checks, have been blocked on these accounts.
However, these accounts could still receive inflows.
This move by the CBN comes after a similar instruction in 2021, when banks were directed to freeze the accounts of 18 companies.
These companies ranged from bureaux de change and construction firms to investment companies, laundering services, and property companies.
Companies affected at that time included Bakori Mega Services, Ashambrakh General Enterprise, Namuduka Ventures Limited, Crosslinks Capital and Investment Limited, IGP Global Synergy Limited, Davedan Mille Investment Limited, Urban Laundry, and several others.
All 18 companies have since had their bank accounts unfrozen by the apex bank.
The latest directive signifies the ongoing efforts of the CBN to regulate and ensure compliance within Nigeria’s banking sector.
However, the lack of explicit reasoning behind lifting the restrictions leaves room for speculation about the regulatory approach of the CBN.
Nigeria’s Central Bank Hikes Interest Rates Amid Rising Inflation
The Central Bank of Nigeria‘s Monetary Policy Committee has announced a modest increase in monetary policy rates to 18.75 percent, a measure aimed at curbing the nation’s escalating inflation.
The Acting Governor of the Central Bank of Nigeria, CBN, Mr. Folashodun Shonubi, unveiled the decision on Tuesday, July 25, 2023, during a press briefing following the conclusion of the 292nd Monetary Policy Committee meeting.
In the prior MPC meeting, the CBN had also taken a tightening stance on the economy by raising the interest rate to 18.5 percent from 18 percent.
“The MPC thus resolved by majority to raise the Monetary Policy Rates,” Shonubi stated. “Six members voted to raise the MPR, four by 25 basis points, two by 50 basis points, while five voted to hold the MPR constant.”
The apex bank has narrowed the asymmetric corridor from +100 to -700 basis points, settling at a new level of +100 and -300 basis points around the Monetary Policy Rate.
Consequently, the MPC voted to increase the MPR by 25 basis points from 18.5 percent to 18.75 percent.
Other key parameters remained unchanged, with the Cash Reserve Ratio, CRR, and Liquidity Ratio (LR) steady at 32.5 percent and 30 percent, respectively.
The MPC’s decision comes amidst a sustained rise in inflation, which hit 22.79 percent in June.
The central bank’s marginal hike in the MPR reflects its strategy to reign in inflation and stabilize the economy.
The persistently high inflation concerns Africa’s largest economy, increasing pressure on the central bank to act decisively.
Today’s rate hike underlines the bank’s commitment to curb inflationary pressures, although the impact on the broader economy and Nigerian households will be keenly watched.
