The Central Bank of Nigeria, CBN, on Wednesday, announced the decision to retain the minimum 65 per cent of Loan Deposit Ratio in the interim.
The announcement was contained in a circular signed by CBN’s Director of Banking Supervision, Mr Ahmad Abdullahi in Abuja.
In the statement, the bank pointed out the remarkable increase in the size of gross credit by the Deposit Money Banks to customers and encouraged all DMBs to maintain the right level as well as ensure that the average daily figure was applied to assess compliance.
“The incentive which assigns a weight of 150 per cent in respect of lending to Small and Medium Enterprises, 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.
In response to the new deposit ratio, the apex bank said it would continue to monitor compliance, analyse market development and make further alterations in the LDR as it deems appropriate.
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