The Central Bank of Nigeria (CBN), on Monday, announced that it had commenced the auction of “CBN Non-Interest Asset-Backed Securities (CNI-ABS) and “CBN Non-Interest Note (CNIN).”
In a circular to all Non-Interest Banks, conventional banks with Non-Interest banking window and Authorised Dealers, posted on its website, the apex bank also announced the deployment of the Nigerian Non-Interest Financial institutions’ Master Repurchase Agreement.
According to the circular, “the introduction of the CNI-ABS aims to provide the non-interest banks with a non-interest financial instrument which supports the bank’s liquidity management objectives.”
On the CNIN, the circular said this non-interest financial instrument, which it developed, “complements the existing non-interest financial instruments by providing an additional avenue for liquidity management through periodic auctions.”
In addition, the circular stated that the Nigerian Non-Interest Financial institutions’ Master Repurchase Agreement, “aims to standardize and regulate the conduct of repurchase (repo) transactions in the Non-Interest Banking sector, establish an internationally acceptable guide and define responsibilities for counterparties, including the Central Bank of Nigeria.”
The circular emphasised that participants are not allowed to access the CBN’s discount window on CNI-ABS and CNIN auction days.
