Breaking: CBN keeps banks’ LDR at 65%
The Central Bank of Nigeria, CBN, Wednesday, chose to keep the 65 per cent Loan Deposit Ratio, LDR, for commercial banks in Nigeria.
The LDR at 65 per cent was retained because of the growth and improvement in credit the CBN said.
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The CBN made this known in a circular signed by its Director of Banking Supervision, Mr 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.
The CBN 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 furher 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.
