CBN Raising LDR To 70%

By Emmanuel Aziken, Editor

The Loan to Deposit Ratio for deposit banks in the country is to be increased to 70%, a senior official of the Central Bank of Nigeria, CBN announced on Tuesday.

The increase the CBN official said would take effect from 2020.

Mr. Hassan Belllo made the revelation at a workshop for journalists in Yola, Adamawa State organsied by the Nigeria Deposit Insurance Corporation (NDIC) in Yola, Adamawa State.

He justified the increase upon what he alluded to benefits to the economy arising from the progressive rise in the LDR since July 2019.

The apex bank had in June 2019 given banks in the country to raise the LDR to 60% by September ending.

At the beginning of October the apex bank also caused another jerk to 65% with an ultimatum on the deposit banks to attain the new ratio by December ending.

While the progressive increase in the LDR has been lauded by some stakeholders, others have, however, called for caution on the strength of possible distress it could bring to the banks through a spiraling on bad debts.

Moody’s the United States rating agency on Monday cited masked NPLs as a potential threat to Nigerian banks in 2020.

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