Following the tight monetary policy regime by the Central Bank of Nigeria (CBN), which led to liquidity squeeze, Deposit Money Banks (DMBs) and merchant banks borrowed a whooping N131.42 trillion from the CBN in 2024 to meet their daily business obligations.
According to data released by the CBN, the N131.42 trillion borrowed in 2024 is about 636.6 per cent increase over N17.84 trillion banks and merchant banks operating in Nigeria borrowed in 2023.
The CBN data showed that DMBs and merchant banks borrowed the highest amount in March 2024 and the lowest amount in January 2024.
Specifically, about N21.74 trillion was borrowed by DMBs and merchant banks in March 2024, while N2.9 trillion was the lowest amount borrowed in January 2024.
DMBs and merchant banks access lending from the apex bank using the Standing Lending Facility (SLF) window and deposit excess liquidity with the apex bank using the Standing Deposit Facility window (SDF).
The CBN provides the SLF, a short-term lending window for banks and merchant banks, to access liquidity to run their day-to-day business operations.
