Unic Press UK: Nigeria’s central bank has reviewed its regulatory measures for improving lending to the real sector, a circular, reference number BSD/DIR/GEN/LAB/12/049 of September 30, 2019, signed by the Central Bank of Nigeria (CBN) Director of Banking Supervision, Bello Hassan, reads.
Through its circular to all banks in Nigeria, the CBN announced an upward review of its minimum Loan to Deposit Ratio (LDR) target for all Deposit Money Banks (DMBs) from 60% to 65% as it aims to sustain the remarkable gains – an increase by ₦829.40 billion or 5.33% from ₦15,567.66 billion at end-May 2019, to ₦16,397.06 billion as at September 26, 2019.
In order to ensure strict compliance with its minimum LDR, the CBN warns that failure to meet the regulatory guideline on or before December 31, 2019 shall result in a levy of additional Cash Reserve Requirement equal to 50% of the lending shortfall implied by the target LDR.
Meanwhile, there are reports that the CBN has imposed levies of circa $1.3 billion on banks that failed to meet the earlier guidelines prior to the latest upward review.
In a report Saturday, the Reuters news agency said: “Nigeria’s central bank has levied a charge on 12 banks for a total of more than 400 billion naira ($1.3 billion) for failing to increase loans to meet a regulatory target,” citing three banking sources and one of the lenders affected.