Nigeria apex bank, the Central Bank of Nigeria (CBN) has fined 12 major banks a whooping N499.1billion For breaching its guidelines on lending to the real sector of the economy

According to the approved debit instruction issued by CBN, the banks will lose the money at source from their Cash Reserve Requirement (CRR) with the CBN, the affected banks and the amount they will pay are:

  1. Citibank (N100,743,055, 321)
  2. First Bank of Nigeria (N74,668,880,480)
  3. FBNQuest Merchant Bank (N2, 697,456,144)
  4. First City Monument Bank (FCMB), (N14, 371,064, 742)
  5. Guaranty Trust Bank (N25, 147, 933, 628).
  6. Jaiz Bank (N7, 525, 165,552)
  7. Keystone Bank (N4, 162, 938, 879)
  8. Rand Merchant Bank (N2, 823,177,399)
  9. Standard Chartered Bank (N30,027,137,984)
  10. SunTrust Bank (N1,703,205,427)
  11. United Bank for Africa (N99,676,181,916)
  12. Zenith Bank (N135,629,337,625).

A CBN circular: “Regulatory Measures to Improve Lending to the Real Sector of the Nigerian Economy,” says in order to ramp up economic growth through investment in real sector, the CBN approved that all banks should maintain a minimum LDR of 60 per cent by September 30.

Based on the guidelines, failure to meet the minimum loan to deposit ratio of 60 per cent by October 1 would attract a levy of fine which is additional CRR equal to 50 per cent of the lending shortfall of the target.

Central bank of Nigeria (CBN) Governor Godwin Emefiele had said that banks that fail to meet its directive on the 60 per cent LDR would be penalised at the expiration of the deadline.

“Failure to meet the above minimum LDR by the specified date shall result in levy or additional Cash Reserve Requirement equal to 50 per cent of the lending shortfall of the target,” CBN Director, Banking Supervision, Ahmad Abdullahi, said in the July 3 circular.

The LDR policy is expected to push banks to increase lending to high risk-borrowers, with the potential of incurring heavy losses and higher non-performing loans.

To encourage SMEs, retail, mortgage and consumer lending, these sectors shall be assigned a weight of 150 per cent in computing LDR for this purpose.