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SMEs Failure To Achieve Target Shall Attract Levy – CBN

Director of Banking Supervision, Central Bank of Nigeria, CBN, Mr Ahmad Abdullahi, in Abuja said on Wednesday that it has retained the minimum 65 percent Loan Deposit Ratio (LDR) in the interim.

The CBN stated this in a circular signed by its Director of Banking Supervision, Mr. Ahmad Abdullahi.

According to the circular, the CBN had noticed a remarkable increase in the size of gross credit by the Deposit Money Banks (DMBs) to customers.

It enjoined all DMBs to maintain this level and ensure that average daily figures were applied to assess compliance.

The bank said: “The incentive which assigns a weight of 150 percent in respect of lending to Small and Medium Enterprises (SMEs), retail, mortgage as well as consumer lending shall continue to apply.

READ ALSO: Banks flout CBN’s Directive On Bank Charges

“While failure to achieve the target shall continue to attract a levy of additional cash reserve requirement of 50 percent of the lending shortfall of the target LDR on or before March 31, 2020.

“DMBs are further encouraged to maintain strong risk management practices regarding their lending operations.”

The apex bank said it would continue to monitor compliance, review market development and make further alterations in the LDR as it deems appropriate. (NAN)

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