Nigerian banks have yet to raise deposit rates, more than a month after the Central Bank of Nigeria (CBN) raised the monetary policy rate (MPR), the benchmark interest rate.
On May 24, the CBN raised the MPR by 150 basis points to 13%, for the first time in six years.
Deposit banks should raise their customers’ deposit rate to a minimum of 10% of the policy rate.
BusinessDay’s findings show that only two banks have reviewed their customers’ deposit rates.
“Banks want to take unfair advantage of customers by not raising their rates, otherwise they should have done so immediately after the CBN raised the MPR,” said Uju Ogubunka, chairman of the Bank Customers Association of Nigeria.
Ogubunka said the development could discourage savings and put an end to financial inclusion.
But Justice Monye, executive director of Heritage Bank, said what banks are doing now is asset repossession.
Also Read: Here’s Why Savings Rates Are Slowly Rising
Fidelity Bank raised its deposit rate to 1.3% per annum from 1.15% previously.
“In line with the recent adjustment of the monetary policy rate from 11.5% to 13% by the Central Bank of Nigeria, please note that effective June 10, 2022, the following interest rate will apply to our account products savings,” Fidelity Bank said. in a notice to its customers.
United Bank for Africa has updated its savings rate offer on its website. The bank offers an interest rate of 2.75% for savings ranging from 50,000 to 90,999 naira, and 3.5% for 250 million naira.
“The increase in the savings rate will help encourage deposits and increase the amount of funds available for lending to the real sector,” said Ayodele Akinwunmi, relationship manager at FSDH Merchant Bank.
“The increase in the savings rate was caused by the increase in the monetary policy rate from 11.5% to 13%. Recall that the savings rate that banks charge customers is linked to the MPR,” he said.
Taiwo Oyedele, head of tax and corporate advisory services at PwC, said that given rising inflation and interest rates locally and globally, it is inevitable that banks will raise interest rates. interest on savings just as they raised their loan rates following the recent upward adjustment of 150 basis points in the RPM.
“Yields are generally on the rise, so raising the interest rate on savings may be more to help banks retain the deposits they currently have than to attract more deposits,” he said. he declared.
In April 2022, seven banks were offering between 0.75% and 4.20% average interest on deposits while 14 lenders were offering 1.15%, according to data from the CBN website.
“In pursuit of the transparency and full disclosure stance of the Central Bank of Nigeria, the Monetary Policy Committee has decided that henceforth the lending rates obtainable at all depository banks will be made public to guide decisions business,” the banking regulator said.
Rates published on April 22, 2022 showed that the seven banks were Heritage Bank, which offers a 4.20% interest rate on savings; Citi Bank (1.20%), Providus Bank (0.75%), Standard Chartered Bank (2.16%), SunTrust Bank (4.10%), Union Bank (0.85%) and Unity Bank (1 .90%).
Other banks offering 1.15% interest on deposits include Access Bank, Ecobank, FCMB, GTBank, Globus Bank, Keystone Bank, Polaris Bank, Stanbic IBTC, Sterling Bank, Titan Trust Bank, Wema Bank and Zenith Bank .
The CBN had, on September 1, 2020, revised the minimum savings deposit rate from banks to a minimum of 10% of the MPR subject to negotiation of rates with customers.