Banks Criticized for Sterilizing N91.1tn at CBN

The Alliance for Economic Research and Ethics criticized commercial banks for abandoning their core intermediary role, which is essential for supporting economic growth. They highlighted that N91.1 trillion remains sterilized at the Central Bank of Nigeria (CBN), indicating a failure in credit allocation to the real sector.

The report, presented by Hon. Dele Oy, former president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, noted that despite improvements in government revenue, there are persistent leakages and rising debt obligations.

The report also pointed out that banks are choosing to self-regulate rather than support economic growth, leading to a significant decline in lending. The CBN's standing deposit facility has seen a substantial increase, with banks placing N425.86 trillion in the first five months of 2026 alone.

The report emphasizes that the current banking behavior, influenced by high-interest rates and risk-free returns from the CBN, is detrimental to credit creation in the real sector.