CBN Reduces Banks’ Loan To Deposit Ratio To 50%

CBN Reduces Banks’ Loan To Deposit Ratio To 50%

Central Bank of Nigeria, CBN has reduced the Loan to Deposit Ratio, of banks to 50 per cent from 65 percent.

The reduction was announced via a circular to Deposit Money Banks titled “Re: Regulatory Measures to Improve Lending to the Real Sector of the Nigerian Economy”.

The circular was signed by Acting Director, Banking Supervision Department, CBN, Adetona Adedeji.

In a bid to increase lending to the economy especially Small and Medium Enterprises, retail mortgage and consumer loans, the CBN on July 3, 2019 increased Banks’ LDR to 60 per cent from 57 percent. The LDR was further raised to 65 per cent in January 20020.

The reduction in the LDR according to analysts at Afrinvest Securities is to allow banks to comply with the Cash Reserve Ratio, CRR of 45 per cent.

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