Nigeria’s central bank orders ₦1bn collateral cushion for OTC settlement

The Central Bank of Nigeria (CBN) has ordered that Deposit Money Banks (DMBs) must keep at least ₦1 billion (USD$2.8 million) collateral in form of government or CBN securities for them to participate in over-the-counter (OTC) trade settlement. Lack of provision of the pledge or failure to top-up a pledge when required will result in exclusion from the market. The central bank explained in a circular that this move was part of efforts to “enhance efficiency in trading and post-trade activities and build confidence in the financial markets.”

Read the circular


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