Business

CBN refunds part of N500bn paid as penalty by banks over failure to meet LDR

Published

5 years ago

October 17, 2019

The Central Bank of Nigeria (CBN) has refunded part of N500 billion penalty deducted from banks as additional cash reserves after they failed to meet the September deadline of increasing lending to deposit ratio (LDR) to 60% (borrowing).

CBN’s head of banking supervision, Ahmad Abdullahi, confirmed to Bloomberg that all the banks involved got a refund at the end of September.

“Most of them that were involved got a refund after they met the requirement at the end of September,” Abdullahi said.

The banks that failed to meet the apex bank’s deadline were Zenith Bank, CitiBank, UBA, FirstBank, Standard Chartered Bank, GTBank, FCMB, Jaiz Bank, Keystone Bank, and SunTrust Bank.

The banks were fined a day to the deadline set by the apex bank for failing to meet LDR of 60%, and later increased the LDR to 65%.

The increase in LDR by the regulator was aimed at boosting credit to small and medium-sized businesses as well as consumers and help revive the economy.

Zenith Bank and CitiBank paid the biggest share of N135.6 billion and N100 billion respectively. UBA was fined N99.7 billion, FirstBank – N74.7 billion, Standard Chartered Bank – N30 billion, GTBank – NN25 billion, FCMB – N14.4 billion, Jaiz Bank – N7.5 billion, Keystone Bank – N4 billion, and SunTrust Bank N1.7 billion.

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