In a bid to boost growth of the Nigerian economy through investment in the real sector, the Central Bank of Nigeria has approved new guidelines which states that,
All Deposit Money banks are to maintain a minimum Loan to Deposit Ratio of 60% by September 30 this year and the ratio will be subject to quarterly review.
The aim is to encourage Small and Medium Enterprises, Retail, Mortgage and Consumer Lending, and they are given a weight of 150% in computing the Loan to Deposit Ratio.
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The Apex Bank says failure to meet the above minimum LDR by the specified date shall result in a levy of additional Cash Reserve Requirement equal to 50% of the lending shortfall.
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