By Etuka Sunday
Bankers’ Committee yesterday confirmed that Loan to Deposit Ratio of all the Deposit Money Banks (DMBs) in Nigeria has risen by N47.3 billion to stand at a total of about N860 billion within the last 11 weeks.
The bank managers disclosed this at a joint media briefing shortly after the Bankers’ Committee meeting with the Central Bank of Nigeria in Abuja.
The increment was attributed to the circular that was issued by the CBN in July designed to compel the banks to lend to the real sector.
“We talked about the fact that within that short space of time we’ve been able to see about N860 billion in assets growing which is very good,” Executive Director, Risk management department at Standard Chartered Bank, Mobola Faloye said during the briefing.
The Managing Director, City Bank Nigeria Ltd, Akin Dawodu said the development was as a result of collaboration between CBN and all the banks to increase corporate and retail credit to the real sector of the economy with a view to support economic growth and investment in Nigeria.
The General Managing Director of Zenith Bank Plc, Ebenezer Onyeagwu while confirming that the Loan to Deposit policy of the central bank has helped to boost the rate of credit in the system, said “It demonstrates the fact that the banks are in Congress with CBN in implementing the initiative. Everyone of us is ready to ensure we achieve the 65 per cent target set for December.”
The essence is to boost growth and create a multiplier effect in the economy. It is expected to open up the entire economy and a cycle of continues economic activities. We believe that the CBN should be supported.
Zenith Bank’s Onyeagwu said the aggressive response of the banks to the policy was based on the fact that the central bank has created lots of incentives for the DMBs to trade with and create employment.
“There are lot more incentives for us to create loans. One of them is the initiative to include the fact that within the capability of BVN, a deliquent or defaulting borrower can be traced within the system. And where he has funds in other banks and keeping a loan in another bank, it can be recooped.
“The big challenge we have in creating loan is character. Character has been lacking. Once you see any spike or there is an upheaval, the borrower takes a flight. With what we have now, it can’t happen. That’s an incentive.
“If you look deeper again in what CBN has done, there are a lot more intervention schemes available now – we have the creative sector scheme, we have the Agricultural Credit Support Scheme (ACSS) we have the CRR lending. These incentives and developments have come up to enable and encourage banks to create more loans. For as long as we have it, can only grow. This is our country. The potentials of this country remain very enomous,” the Zenith bank chief stated.