The Central Bank of Nigeria has given a directive to banks and other financial institutions to stop the sale of treasury bills to individuals and small firms with effect from November 29.
Some bank officials who disclosed this to The PUNCH said only big corporate organisations would be allowed to do treasury bills investments.
Our correspondents learnt that banks were already notifying their customers of the new directive.
The sources, however, said the existing treasury bills investments would be allowed to continue till the end of their maturity dates.
A bank official said, “Operators are trying to see if the November 29 deadline given for the implementation by the CBN could be extended, so as to create enough awareness. But there is no move for the reversal of the directive.”
An operator said the inaccessibility of treasury bills might lead to an increase in savings deposits of the banks, attracting interest rates below what the treasury bills offered.
A source from the CBN said the move was to stop the mop-up of funds from the system through the treasury bills.
He said, “Many people with huge cash prefer to keep their funds idle in treasury bills instead of investing the funds. Some people collect huge severance package, have huge funds but they have refused to invest the money.
“We want these funds to be useful in the economy so that they will be available in the banks and can be invested to create more jobs in the country.”
He noted that the CBN had increased the Loan to Deposit Ratio of the banks from 60% to 65%.
Source: Punch News