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CENTRAL BANK OF NIGERIA

MONETARY, CREDIT, FOREIGN TRADE AND EXCHANGE POLICY GUIDELINES FOR FISCAL YEARS 2012/2013

(MONETARY POLICY CIRCULAR NO. 39)

JANUARY, 2012

Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2012/2013

TABLE OF CONTENTS
1.0 2.0 INTRODUCTION REVIEW OF POLICY ENVIRONMENT AND MACROECONOMIC DEVELOPMENTS IN 2011 2.1 2.2 2.3 Policy Environment Macroeconomic Developments Outstanding Policy and Macroeconomic Issues in 2010/2011 2.3.1 2.3.2 2.4 Policy Challenges Macroeconomic Issues 1

2 2 3 8 8 8 10

Outlook for the Domestic Economy in 2012/2013

3.0

MONETARY AND CREDIT POLICY MEASURES IN 2012/2013 3.1 3.2 Objectives and Strategy of Policy Policy Measures 3.2.1 Open Market Operations 3.2.2 Reserve Requirements 3.2.2.1 Cash Reserve Ratio (CRR) 3.2.2.2 Liquidity Ratio (LR) 3.2.3 Discount Window Operations 3.2.4 Interest Rate Policy 3.2.5 Remittance of Value Added Tax (VAT), Custom Duties and Other Collections 3.2.6 Framework for Determining Banks’ Cost of Funds 3.2.7 Framework for the Implementation of Risk-Based Interest Pricing Model 3.2.8 Federal Government of Nigeria (FGN) Bonds and Nigerian Treasury Bills (NTBs) Central Bank of Nigeria | January 2012

12 12 12 13 14 14 14 15 15

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19 i

Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2012/2013

3.2.9 Maintenance of Savings and Current Accounts 3.2.10 Ways and Means Advances 3.2.11 The Payments System (i) Promoting a Cashless Society, use of Cheques and e-Money (a) The Nigerian Cheque Printers Accreditation Scheme (NICPAS) (b) Cheque Clearing (c) Cash Deposit/Withdrawal Limits (d) Maximum Limit on Cheque Payments (ii) Electronic Payments (iii) CBN Inter-bank Funds Transfer System (CIFTS) Operations (iv) Settlement and Clearing Banks (v) Card Security 3.2.12 Publication of Financial Statements 3.2.13 Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria 3.2.14 Other Policy Measures (a) Financing Small and Medium Enterprises (SMEs) (b) SME Credit Guarantee Scheme (SMECGS) (c) Microfinance Development Fund (MDF) (d) Refinancing and Rediscounting Facility (RRF) for SME/ Manufacturing Sector (e) Commercial Agricultural Credit Scheme (CACS) (f) Agricultural Credit Support Scheme (ACSS) (g) Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) (h) Infrastructure Finance (i) Entrepreneurship Development Centres (EDCs) (j) Financial Inclusion Strategy Central Bank of Nigeria | January 2012

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30 30 31 31 ii

Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2012/2013

(k) Orderly Development of the Banking System i. The New Banking Model Minimum Paid-up Capital Requirement ii. Transparency in Banks’ Operations iii. Moral Suasion (l) Public Sector Deposits (m) Asset Management Corporation of Nigeria (AMCON) (n) Commercial Paper and Bankers’ Acceptances for Repo Transactions 3.2.15 Monetary Policy Measures Retained/Modified in Fiscal Years 2012/2013 i. ii. iii. iv. Bank Credit Expansion Prudential Guidelines for Licensed Banks Capital Adequacy Foreign Guarantees/Currency Deposits as Collateral for Naira Loans v. vi. Rules for Currency Transactions Responsibilities of Banks’ External Auditors to the Supervisory Authorities vii. Banks’ Operating Subsidiary Companies Offering Financial Services viii. ix. x. xi. Agricultural Credit Guarantee Scheme (ACGS) Interest Drawback Programme (IDP) Returns from Banks Other Financial Institutions a. b. c. d. Finance Companies Primary Mortgage Banks (PMBs) Microfinance Banks (MFBs) Development Finance Institutions (DFIs) Central Bank of Nigeria | January 2012

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40 40 41 41 42 42 42 43 43 iii

Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2012/2013

e. xii. xiii. xiv.

Bureaux du Change (BDCs)

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