Home Economy CBN scales down loan to deposit rate to 50% 

CBN scales down loan to deposit rate to 50% 

by Business News Report

Central Bank of Nigeria  CBN has in a circular to Deposit Money Banks titled “Re: Regulatory Measures to Improve Lending to the Real Sector of the Nigerian Economy” announced a scale down of the Loans to Deposits Rate (LDR) by 15.0ppts to 50.0% – reversing previous threshold set by the past CBN administration in January 2020.

This downward review of LDR allows banks comply with the 45.0% CRR directive, and eases off pressure on the lenders considering the restrictive nature of other CBN directives including the Net Open Position (NOP) ceiling of 20.0% short and 0.0% long. Thus, we believe this policy would enhance ability of banks to sweat out assets without creating unnecessary risks.

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