The Central Bank of Nigeria (CBN)
says 12 banks have been debited N499 billion for failing to give out 60% of
their deposits as loans.
The cash reserve of the banks
held by the CBN has been debited.
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% saying: “Failure to meet the above minimum LDR
by the specified date shall result in a levy of additional Cash Reserve
Requirement equal to 50% 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
On Tuesday, the CBN again raised
the LDR to 65% and set a December deadline for banks.
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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