Last Updated on November 25, 2021 by Ope Quadri
If you’ve ever applied for a credit facility at any of the Nigerian banks, you may have come across banking terms like PFIs and CRR. PFIs means Participating Financial Institutions while CRR means Cash Reserve Ration
Most times, the Central Bank of Nigeria (CBN) would clearly state that only CRR contributing Deposit Money Banks (DMBs) in Nigeria can participate in a loan application, just like we’ve seen in the guidelines released by the apex bank on how to access gas intervention fund.
So, what does CRR mean? And what are the banks that meet the CBN stipulated CRR to take part in the apex bank’s credit facility for local production?
Meaning of CRR
Cash Reserve Ratio (CRR) is the percentage of a bank’s total deposits that it needs to maintain as liquid cash. It is CBN requirement for all financial institutions as it’s obtainable in almost every country and the cash reserve is kept with the CBN.
A bank does not earn interest on the liquid cash it maintains with the apex bank. Banks can not also use their CRR for investment or lending, it is fixed. In Nigeria, the CBN has the constitutional and financial backing of the law to set the cash ration for all financial institutions in the country.
Current CRR requirement in Nigeria
On January 24, 2020, CBN officially announced the increment of CRR from 22.5percent to 27.5percent at the end of its two-day Monetary Policy Committee (MPC) meeting. It had been 22.5% before the new change
Banks in Nigeria That Meet CRR of CBN
There are 37 Deposit Money Banks in Nigeria and they are certified by the CBN, meaning they’ve met the CRR as set by apex bank, and can accept loan applications on behalf of the CBN e.g the ongoing 100 for 100 credit facility by the CBN.
DMBs in Nigeria are divided into the following category:
|Category||No. of banks|
|commercial banking licence with international authorization||8|
|Commercial banking licence with national authorization||11|
|Commercial banking licence with regional authorization||4|
|Non-interest banking licence with national authorization||1|
|Non-interest banking licence with regional authorization||2|
|Merchant banking licence with national authorization||6|
|financial holding companies||5|
The banks are:
|commercial banking licence with international authorization in Nigeria||First City Monument Bank Plc|
|United Bank Of Africa Plc|
|First Bank Nigeria Limited|
|Zenith Bank Plc|
|Access Bank Plc|
|Guaranty Trust Bank Plc|
|Fidelity Bank Plc|
|Union Bank Of Nigeria Plc|
|Commercial banking licence with national authorization||Standard Chartered Bank Limited|
|Unity Bank Plc|
|Sterling Bank Plc|
|Keystone Bank Limited|
|Ecobank Nigeria Plc|
|Wema Bank Plc|
|Citibank Nigeria Limited|
|Titan Trust Bank Ltd|
|Polaris Bank Plc|
|Heritage Bank Limited|
|Stanbic IBTC Bank Plc|
|Commercial banking licence with regional authorization||Providus Bank Plc|
|Parallex Bank Ltd|
|Globus Bank Limited|
|Suntrust Bank Nigeria Limited|
|Merchant Banking Licence With National Authorization||Nova Merchant Bank|
|Greenwich Merchant Bank|
|FSDH Merchant Bank|
|Rand Merchant Bank|
|Coronation Merchant Bank|
|FBN Merchant Bank|
|Non-Interest Banking Licence With National Authorization||Jaiz Bank Plc|
|Non-Interest Banking Licence With Regional Authorization||TAJ Bank Limited|
|LOTUS Bank Limited|
|Financial Holding Companies In Nigeria||STANBIC IBTC Holdings Plc|
|FSDH Holding Company|
|GTB HOLD CO|
|FBN Holdings Plc|
|FCMB Group Plc|
All the financial institutions have their corporate headquarters in the commercial city of Lagos, except two of the Islamic banks in Nigeria that have their headquarters in Abuja, the Federal Capital Territory (FCT). They are: 1) Jaiz Bank, 2) TAJ Bank.
The above DMBs all have a unique SWIFT code associated with them for those who make or who want to make international or cross-border payments from one bank to the other.
You can refer to this list anytime you’re applying for any CBN loan and the apex bank says you can only apply through CRR contributing DMBs.