CBN announces banks’ minimum loan deposit ratio

The Central Bank of Nigeria (CBN), says it has retained the minimum 65 per cent of Loan Deposit Ratio (LDR) in the interim.

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.