CBN to Limit Banks Investment in Treasury Bills, Bonds
*Calls for more credit to private sector
The Central Bank of Nigeria (CBN) Tuesday said it will limit investments by commercial banks in the areas of treasury bills and government bonds.
The CBN Governor, Mr. Godwin Emefiele, said this was because many banks were now focusing in this area and not doing much in lending to the private sector.
He said lending to the private sector and checking the investment of the banks in treasury bills and bond was mainly to stimulate the economy.
Emefiele who spoke in Abuja during the meeting of the Monetary Policy Committee (MPC) meeting said:
“The truth is that yes, according to our own regulations, there is a particular minimum percentage of treasury bills or government securities that the banks must invest in, in order to remain liquid. But again, we have observed and unfortunately and increasingly so, that the banks, rather than even focusing on granting credit to the private sector, they tend to direct their focus mainly on buying government securities.
“The MPC has frowned on that and has directed the management of the CBN to put in place policies or regulations that would restrict the banks from unlimited access to government securities.
“It is important and expedient that the committee gives this directive to management because this country badly needs growth. For us to achieve growth, those whose primary responsibility that it is to provide credit, who act as intermediaries in providing credit and are called catalysts to credit and growth in the economy must be seen to perform that responsibility.”
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