The Central Bank of Nigeria (CBN) has sanctioned 12 commercial lenders for their failure to meet the loan-to-deposit-ratio of 60 percent at the end of September deadline.
The bank's accounts with the regulator were debited to the tune of 499 billion naira to make up for the increase cash reserve ratio (CRR) of about 50 percent requirments for banks that failed to meet the LDR as loans to the private sector.
The CRR is a portion of the banks’ deposits kept with the CBN for regulatory reasons.
In July, the CBN had increased the loan to deposit ratio to 60 percent, to stimulate economic growth and to encourage banks to increase credit to the private sector.
The CRR is a portion of the banks’ deposits kept with the CBN for regulatory reasons.
In July, the CBN had increased the loan to deposit ratio to 60 percent, to stimulate economic growth and to encourage banks to increase credit to the private sector.
The regulator had said that “Failure to meet the above minimum LDR by the specified date shall result in a levy of additional Cash Reserve Requirement equal to 50 percent of the lending shortfall of the target LDR”.
The affected banks are:
Citibank – N100,743,055,321
First Bank of Nigeria – N74,668,880,480
FBNQuest Merchant Bank – N2,697,456,144
First City Monument Bank (FCMB) – N14,371,064,742
Guaranty Trust Bank – N25,147,933, 628
Jaiz Bank – N7,525,165,552
Keystone Bank – N4,162,938, 879
Rand Merchant Bank – N2,823,177,399
Standard Chartered Bank – N30,027,137,984
SunTrust Bank – N1,703,205,427
United Bank for Africa – N99,676,181,916
Zenith Bank – N135,629,337,625
This week, the CBN again increased the LDR to 65 percent and set a December deadline for banks to meet the new requirement.
The CBN said the newly revised LDR is informed by the noticeable growth in the level of the industry gross credit.
According to data provided by the CBN, the credit provided to businesses increased by N829.40 billion between the end of May and September 26.
The LDR policy is expected to encourage lending to small businesses and reduce banks’ appetite for investing in government securities like treasury bills.
The affected banks are:
Citibank – N100,743,055,321
First Bank of Nigeria – N74,668,880,480
FBNQuest Merchant Bank – N2,697,456,144
First City Monument Bank (FCMB) – N14,371,064,742
Guaranty Trust Bank – N25,147,933, 628
Jaiz Bank – N7,525,165,552
Keystone Bank – N4,162,938, 879
Rand Merchant Bank – N2,823,177,399
Standard Chartered Bank – N30,027,137,984
SunTrust Bank – N1,703,205,427
United Bank for Africa – N99,676,181,916
Zenith Bank – N135,629,337,625
This week, the CBN again increased the LDR to 65 percent and set a December deadline for banks to meet the new requirement.
The CBN said the newly revised LDR is informed by the noticeable growth in the level of the industry gross credit.
According to data provided by the CBN, the credit provided to businesses increased by N829.40 billion between the end of May and September 26.
The LDR policy is expected to encourage lending to small businesses and reduce banks’ appetite for investing in government securities like treasury bills.
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