Nigerian banks have moved swiftly to cut the interests paid on savings accounts following a central bank decision to lower the bar.
In a circular to banks on August 31, the Central Bank of Nigeria said a minimum of 10 percent of the Monetary Policy Rate will now be paid on savings deposits with effect from September 1. With the MPC rate currently at 12.5 percent, that brought down the minimum interest rate to 1.5 percent a year.
The financial houses have been quick to implement the singularly pro-bank measure by the regulator. Most of them wrote their customers by September 3 that interest on savings deposits have been scaled down accordingly from the previous range of about 5 percent.
“Effective September 1, 2020 and in line with current market realities, the interest rates on our Savings accounts and its variants have been adjusted,” Standard Chartered Bank told its customers in a September 3 email.
While rejecting recent hikes in electricity tariffs and fuel prices in a statement, the Nigerian Labour Congress, the country’s biggest trade union grouping, pointed to the decision to lower interests on savings as evidence of a multi-sided economic war on the people.
“To compound it, they also reduced the interest rate of savings, which affects mostly the poor and the vulnerable,” Ayuba Wabba, president of the congress, told reporters in Abuja.