The Central Bank of Nigeria (CBN) has ordered Nigerian banks to increase the interest paid on savings deposit accounts from 1.4% to 4.2% beginning from 1 August, 2022.
It made known in a circular dated August 15, 2022, titled “Review Of Interest Rate On Savings Deposits” and signed by Haruna B. Mustafa, Director Of Banking Supervision.
The apex bank explained that the increase in savings interest rates, which is effective from August 1, was made in light of the return to complete normalcy after taking into account the current macroeconomic conditions.
“It will be recalled that as part of the efforts to ameliorate the impact of the COVID 19 pandemic, the Central Bank of Nigeria reduced the minimum interest rates payable on local currency savings deposits from 30 per cent to 10 per cent of the Monetary Policy Rate (MPR).
“This was aimed at stimulating growth in the larger economy following the economic-slowdown occasioned by the Pandemic.
“However, following the return to full normalcy and considering the prevailing macroeconomic conditions, it has become necessary to effect an upward adjustment of the interest rate payable on local currency savings deposits.
“Accordingly, effective August 1, 2022, the negotiable minimum interest rate on local currency savings deposits shall be 30 per cent of MPR.
“This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020, ” the circular said.
With this development, the interest rate will be raised to at least 4.2 per cent from the 1.4 per cent.
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