..Unveils New Regulation
Yemisi Izuora
As part of efforts to realize its set targets of achieving double digit Gross Domestic Product, GDP, growth in the next five years, the Central Bank of Nigeria, CBN, has issued a new regulatory measures aimed at boosting lending to the real sector of the economy.
Through a letter signed by Ahmad Abdullahi, Titled Regulatory measures to improve lending to the real sector of the Nigerian economy, thenCBN, said “In order to ramp up growth of the Nigerian economy through investment in the real sector, the Central Bank of Nigeria has approved the following measures:
“All Deposit Money Bank DMB are hereby required to maintain a minimum loan to deposit of 60 per cent by September 30, 2019. This ratio shall be subject to quarterly review. To encourage SMEs retail, Mortgage and consumer lending, these sectors shall be assigned a weight of 150 per cent in computing the loan to deposit for this purpose.
“The CBN shall provide a frame work for classification of enterprises/businesses that fall under these categories. Failure to meet the above minimum loan to deposit ratio by the specified date shall result in a levy of additional cash reserve requirement equal to 50 per cent of the lending shortfall of the target loan to deposit ratio. The CBN shall continue to review development in the market with a view to facilitating greater investment in the real sector of the Nigerian economy. The letter is with immediate effect”.