This study examined the Impact of Interest Rate Policy on Deposit Money Banks in Nigeria over the period of 10 years (2007-2016). Secondary data source was explored in presenting the facts in which all Nigeria’s economic outputs were considered. The secondary data are obtained from CBN annual reports. The model for the study has its dependent variables to be the Return on Assets (ROA) and its independent Variable was Lending Rates, Interbank rates, treasury bills rates and the monetary policy rates, using Regression Model Analysis to- test Impact of Interest Rate Policy on Deposit Money Banks in Nigeria and To examine the relationship between Lending rate, Interbank rate, treasury bills rate and the monetary policy rates and Return on Assets of Deposit Money Banks in Nigeria. The result shows that there is a positive significant relationship between Lending rates and ROA, the Interbank rates have a positive insignificant relationship with ROA, the treasury bills rates have a negative insignificant relationship with ROA while the Monetary Policy Rates have a negative significant relationship with the Return on Assets of Banks. The study recommended Deposit Money banks to monitor the interest on lending carefully. The lending interest ratio positively affects performance. It represents the main earnings by any Deposit Money Banks and therefore for banks to be profitable, they must maintain a reasonable spread, they should try as much as possible to strike a balance in their loan pricing decisions. This will help them to be able to cover cost associated with lending and at the same time, maintain good banking relationship with their borrower.
IMPACT OF INTEREST RATE POLICY ON DEPOSIT MONEY BANKS IN NIGERIA