CBN Unfolds New Policy to Enhance Lending

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The Central Bank of Nigeria (CBN) has taken further steps to ramp up growth in the Nigerian economy, by directing commercial banks to maintain a minimum Loan to Deposit Ratio (LDR) of 60 per cent effective from September 30, 2019.

The LDR was previously at 80 per cent.

The central bank stated this in a letter addressed to all banks dated July 3, 2019, which was signed by the Director of Banking Supervision, CBN, Ahmad Abdullahi.

According to the Bank, the new LDR would be subject to quarterly review.

“To encourage SMEs, retail, mortgage and consumer Lending, these sectors shall be assigned a weight of 150 per cent in computing the LDR for this purpose. The CBN shall provide a framework for classification of enterprises/businesses that fall under these categories,” it added.

More details later…