INTERNATIONAL – Nigeria’s central bank plans to charge 12 banks a total of more than 400 billion naira ($1.3 billion) for failing to meet its minimum loan-to-deposit ratio requirement by a September deadline, three banking sources told Reuters on Thursday.
The central bank has been seeking to boost credit to businesses and consumers after a recent recession in Africa’s biggest economy, but lending has yet to pick up. With growth slow, banks prefer to park cash in risk-free government securities rather than lend to companies and consumers.
Nigeria’s economy is expected to pick up in 2019 with gross domestic product expanding close to 3 percent, up from 1.9 percent last year, according to the central bank.
In July, the central bank asked lenders to maintain a ratio of lending out at least 60 percent of deposits by September as part of measures aimed at getting credit flowing.
Bank chief executives plan to meet with the banking regulator in Abuja on Thursday to discuss the charges, the sources said.