Nigeria: Central Bank Retains Loan Deposit Ratio at 65%

The Central Bank of Nigeria (CBN), says it has retained the minimum 65 per cent of Loan Deposit Ratio (LDR) in the interim.

The regulatory body made this known in a circular signed by its Director of Banking Supervision, Ahmad Abdullahi in Abuja on Wednesday.

The bank explained that it had noticed remarkable increase in the size of gross credit by the Deposit Money Banks (DMBs) to customers.

It enjoined all DMBs to maintain this level as well as ensure that average daily figures were applied to assess compliance.

“The incentive, which assigns a weight of 150 per cent in respect of lending to Small and Medium Enterprises (SMEs), retail, mortgage as well as consumer lending, shall continue to apply.

“While failure to achieve the target shall continue to attract a levy of additional cash reserve requirement of 50 per cent of the lending shortfall of the target LDR on or before March 31, 2020.

“DMBs are further encouraged to maintain strong risk management practices regarding their lending operations,” it said.

The apex bank said it would continue to monitor compliance, review market development and make further alterations in the LDR as it deems appropriate.

(NAN)

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