₦airaland Forum

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

According to an approved debit instruction, the affected banks and the amount they will pay are: Citibank (N100,743,055, 321); First Bank of Nigeria (N74,668,880,480); FBNQuest Merchant Bank (N2, 697,456,144); First City Monument Bank (FCMB), (N14, 371,064, 742) and Guaranty Trust Bank (N25, 147, 933, 628).

Others are Jaiz Bank (N7, 525, 165,552); Keystone Bank (N4, 162, 938, 879); Rand Merchant Bank (N2, 823,177,399); Standard Chartered Bank (N30,027,137,984); SunTrust Bank (N1,703,205,427); United Bank for Africa (N99,676,181,916) and Zenith Bank (N135,629,337,625).

The banks will lose the money at source from their Cash Reserve Requirement (CRR) with the CBN.

The CRR is a portion of the banks’ deposits kept with the CBN for regulatory reasons.

The apex bank, on July 3, 2019, directed banks to maintain a minimum Loan Deposit Ratio (LDR) of 60 per cent by September 30, 2019.

The LDR, which was being reviewed quarterly to improve lending to the real sector, was 58.5 per cent as at May.

It has now been raised to 65 per cent for the last quarter of the year.

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.

https://www.financialwatchngr.com/2019/10/03/cbn-fine-12-banks-n499b-for-not-giving-out-loan-to-customers/

Watch how so hate-filled cretins would spin this.

Good for them

Wow.

They thought the mandate from CBN was a joke. They don't know it was an order from above.

Fine them. Useless trader banks.

No wonder diamond/access bank keeps pushing loan offer to us

agarawu23:
No wonder diamond/access bank keeps pushing loan offer to us

Isn't that what Nigerians have always wanted?

What on earth is this?

Some bank discourage customer's with wicked interest rate.

That's why startups cant grow.

Stingy institutions

AntiBrutus:
Isn't that what Nigerians have always wanted?

no be small o but it better o at 5% at least

agarawu23:
No wonder diamond/access bank keeps pushing loan offer to us

If u see requirements for the loan u go just tire. The list is endless

When I tell bigoted people that religion in Nigeria is scam, they don't believe.

Shey you were all shouting Islamic Banking. Islamic Banking!

Imagine Jaiz an Islamic bank refusing to lend money when that's the sole reason it was started .

Why is Ecobank not on the list??

I dey fear bank loan like leprosy.

Come and see requirements to get 100k business loan.

Naija no just wan help entrepreneurs, you will be paying 5% tax for a business that is yet to take a good head.

Imagine getting loan and paying back interest+5% tax, abeg how much remain?


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Let's handle your web design projects.

Buhari won rich by all means, i see him passing jeff bezos in world richest

True talk

So will CBN now give out the loans to the persons from the fine? Sometimes CBN go just dey carry dey do, Wetin dem go use the fine do now?

hard times for the banks who are working hard on one hand to ensure such loans dont go bad and on the other to meet with CBN policy on loans. Most Nigerian "busyness" men are not credit worthy. You give a business man loan and the next thing he marries another wife.

Dee60:
What on earth is this?

but this loan is meant for salary earner only. because I couldn't get a loan with zenith despite banking with them.


or am I missing something here

Ok

So oh! This is the main reason why Access (Diamond) disturbing with loan alert

Na gtb worse pass. My monthly turnover averages around 10m and they can't even shake body small. I even test them with 10k.. They know I can't do without them as they are the only bank in Nigeria that operates online payment of custom duty..

Hope Gtb is not taking from my money to pay their debt, I have apply for business loan several time but the term and condition is too much to over come it

This policy is very troubling and not healthy for our fickle economy. I have said it before that there is something wrong with this CBN Governor, You want to force the banks to disburse money to every jack, Oga let me ask you a question?
Shey when is time for repayment , you will also assist the Bank's in recouping depositors funds!

Loan whey bois dey use marry, which is intended for real sector.


DOOMs Day is coming in this country and I am scared for my child.

liohan:
When I tell bigoted people that religion in Nigeria is scam, they don't believe.

Shey you were all shouting Islamic Banking. Islamic Banking!

Imagine Jaiz an Islamic bank refusing to lend money when that's the sole reason it was started .

Anything that enters Nigeria becomes a Nigerian. Don't expect the bank to remember it's objectives cos we go change am for them ..las las their money go end for aboki agbada

I think is a good step toward the right direction. Our Economy must work.

See money everywhere and they will still deduct my 65 naira for ATM maintenance. Chai, what a life.

We will indirectly pay finally, good one from CBN thou...young entrepreneurs needs to be encouraged

TwoBottles:
Why is Ecobank not on the list??

Ecobank do give loans but at varying interest rates of 28% to 34%.

Lol