Uche Usim, Abuja

The Bankers Committee on Thursday revealed that banks lent N860 billion credit to various sectors in 11 weeks covering July to September. 

The figure was disclosed by the Executive Director, Risk, Standard Chartered Bank, Mrs Mobola Faloye at the end of the Bankers’ Committee meeting which was held on Thursday in Abuja.

The move, she noted, was in line with the Central Bank of Nigeria’s directive on the 60% Loan to Deposit Ratio of banks.

She said: “We talked about the Loan to Deposit Ratio and how it will grow the economy and we see that within that short space of time we’ve been able to see N860 billion in assets growing which again is very good.

“One of the things that the meeting also reiterated is that we are mindful of the fact that there are some vulnerable sectors that we will be lending to.

“It is important that we mitigate our risks and have what we called a credit clause default clause that allows us to set off the obligations of defaulting party against any other monies that that defaulting party has in the industry.”

The apex bank, 48 hours ago, raised the LDR to 65%.

The committee also debunked claims that N499 billion was deducted from 12 banks by the CBN as fine for failing to meet LDR, saying the report was totally false.

In his remarks, the Managing Director of City Bank Nigeria Limited, Mr Akin Dawodu said the soothing news was as a result of the collaboration between CBN and all the banks to increase corporate and retail credit to the real sector of the economy with a view to supporting economic growth and investment in Nigeria.

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He said the committee discussed various issues in the banking such as the cashless policy, financial inclusion, efficient and cost-effective financial system, consumer lending and economic growth.

On bank charges, he said the committee also discussed ways to make the banking system more cost-effective. We believe it’s something that is in the interest of the general economy.

On his part, the Group Managing Director, Zenith Bank Plc, Ebenezer Onyeagwu said the Loan to Deposit policy of the Central Bank has helped to boost the rate of credit in the system.

“It demonstrates the fact that the banks are in congress with CBN in implementing the initiative. Every one 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 continuous economic activities.

“The CBN never said there is going to be a fine. The circular said at the cut-off point, in the event that you don’t meet the threshold, funds will be debited from you and added to your CRR. What you have there is not a fine, neither is it a levy but a shortfall based on the parameters set by CBN. It’s going to be a continued dynamic process”.

On the possibility of swelling the volume of non-performing loans, he said; “if for any reason the loan that is taken is not paid, most of the reasons we are having NPLs is largely character issue where people take money and they don’t want to repay. But if you make sure that they are going to pay, then, the issue of NPLs will be drastically reduced.

“Let us understand that the incentives in the market now have not been there. There are a 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 delinquent 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 recouped”.

In his remarks, the Executive Director, Stanbic IBTC, Dr Demola Sogunle explained that the increase means that banks were able to record aggregate credit by about 5.5 per cent with a three months period. “The 65% milestone is good for the economy. And it’s also good for the banking system. We are all geared up to go and deliver between now and the end of December the Loan to Deposit Ratio of 65 per cent.

“Based on the facts and figures available to us, it’s been identified that USSD is a critical element within the context of financial inclusion. The princely was discussed robustly and the idea is that the cost for USSD should continue to thread downwards. If that is done, then we will be able to extend financial transactions to the set of people (almost 40 million) or 40% of the adult population in Nigeria that is currently financially excluded will be brought into the financial system if the price of USSD continues to drop.