CBN Bars Individuals, Start-Ups From Investing In Treasury Bills

The Central Bank of Nigeria (CBN) has issued directive to all Money Deposit Banks (MDP) and other financial institutions to ensure that sales of Treasury Bills (T-Bills) are only sold to corporate organisations with effect from November 29, 2019.

The directive imply that individuals and small firms will no longer access T-Bill directly from banks and only big corporate organisations would be allowed invest in T-Bills.

Source has confirmed that MDBs were already notifying their customers of the new CBN directive.

However according to reports, the existing treasury bills investments would be allowed to continue till the end of their maturity dates.

It is money market players would try to see if the November 29 deadline given for the implementation by the directive could be extended, to allow for public more awareness.

Individual investors will be forced to invest in savings deposit of DBMs which has lower interest rate of an average 4% than the T-Bill which is at 12.4% as at October 16 unction.

T-Bill is an instrument that the CBN uses to reduce money in circulation, however these funds usually remain idle and the move of the apex bank would help the individuals re-invest the funds in the economy through job creation.

Similarly, CBN had increased the Loan to Deposit Ratio of the banks from 60% to 65%.