The Central Bank of Nigeria has reportedly 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.
According to the Punch, the development was a move to stop the mop-up of funds from the system through the treasury bills.
“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,” a CBN source revealed to the paper.
This latest move by the CBN would mean that only big corporate organisations that would be allowed to do treasury bills investments
The unavailability of treasury bills is expected to lead to an increase in savings deposits of the banks attracting interest rates below what the treasury bills offered.
Nevertheless, existing Treasury bills investments would be allowed to continue until the end of their maturity dates.
The directive which is yet to be published by the apex bank is expected to come into effect from November 29. Although, there is stipulations that the date might be moved to a future date for proper public sensitisation.