CBN orders 22 Nigerian banks to pledge N1 billion collateral for off-the-counter trade settlement

The Financial Market Department of the Central Bank of Nigeria has ordered all the Deposit Money Banks to pledge a collateral of N1 billion for Off-The-Counter trade settlement.

The directive was given by Dr. Alvan Ikoku, director of the financial market department of the CBN on Thursday, May 31, 2018.

Business Insider SSA gathered that the CBN’s directive is a mandatory collateral worth of the government/CBN securities for the OTC trade settlement.

The pledge was also declared mandatory for all DMBs wishing to participate in the OTC trade settlement.

“Lack of provision of the pledge or failure to top-up a pledge, when required, will result in exclusion from the market,” the circular stated.

Ikoku also stressed that the pledging of the N1 billion takes effect from Friday, June 1, 2018.

ALSO READ: CBN injects fresh $210 million into forex market to prevent shortage of dollars

CBN injects $210 million into forex market

Recently, the CBN injected $210 million into the interbank foreign exchange market to increase liquidity and prevent dollar shortages.

From the money released, the bank injected the sum of $100 million to authorised dealers in the wholesale segment of the market while interests in the Small and Medium Enterprises (SMEs) segment received the sum of $55 million.

Also, the sum of $55 million was apportioned to invisible such as tuition fees, medical payments and Basic Travel Allowance (BTA).

CBN orders 22 Nigerian banks to pledge N1 billion collateral for off-the-counter trade settlement

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