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Business News

CBN debits N499 billion from accounts of 12 banks for failing to meet lending targets

The CBN has fined twelve Nigerian banks for breaching the regulator’s directive on lending to the real sector of the economy.

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CBN advances ban on food imports , Emefiele, Nigeria’s manufacturing sector contracts, as key components shrink, CBN makes case for PSBs, cautions Banks, PSBs against demarketing , Banks' deposit with CBN dropped 68% in 9 months , Devaluation’s drum beats louder

The Central Bank of Nigeria (CBN) has imposed “penalties” on twelve Nigerian banks for breaching the regulator’s directive on lending to the real sector of the economy. The CBN debited a combined sum of N499.1 billion from the vault of the banks and will hold the cash at zero percent interest rates. Most analysts see this as a penalty on the banks affected.  

Nairametrics had reported that the CBN directed banks to maintain a minimum Loan Deposit Ratio (LDR) of 60 percent by September 30, 2019. The LDR was reviewed upwards from 58.5% to 60% with the banks informed to main the LDR till September ending. The LDR has now been increased. All DMBs are to now attain a minimum LDR of 65% by December 31, 2019. 

The banks had been warned by CBN Governor, Godwin Emefiele, of a penalty if they failed to attain the LDR by ending of September 2019. The CBN Director, Banking Supervision, Ahmad Abdullahi, had also stated in July that, “Failure to meet the above minimum LDR by the specified date shall result in a levy or additional Cash Reserve Requirement equal to 50% of the lending shortfall of the target,”. 

List of banks affected: The following banks couldn’t maintain the LDR and their accounts were purportedly deducted as follows; 

  • Citibank (N100,743,055, 321) 
  • First Bank of Nigeria (N74,668,880,480) 
  • FBNQuest Merchant Bank (N2, 697,456,144) 
  • First City Monument Bank (FCMB) (N14, 371,064, 742) 
  • Guaranty Trust Bank (GTBank(N25, 147, 933, 628)
  • Jaiz Bank (N7, 525, 165,552)
  • Keystone Bank (N4, 162, 938, 879)
  • Rand Merchant Bank (N2, 823,177,399) 
  • Standard Chartered Bank (N30,027,137,984) 
  • SunTrust Bank (N1,703,205,427) 
  • United Bank for Africa (UBA) (N99,676,181,916) 
  • Zenith Bank (N135,629,337,625). 

In July, Emefiele had blamed the inability of banks to lend to the private sector on the latter’s choice of investing in risk-free securities rather than lending to the real sector of the economy. Although this directive to encourage Small and Medium Enterprises (SMEs), retail, mortgage, and consumer lending places banks at higher risk, it will be a major boost for Nigeria’s real estate sector. 

Also, home buyers with good jobs may easily secure mortgages as more banks will consider this a better lending option since the loans will be secured against the property.  

Reacting to reports by a section of the media describing the deduction as heavy fine of banks, the CBN has clarified that the deductions were only proportionate to the levels of default and banks are not losing the money. Nairametrics had also earlier reporting this deduction as a fine.

CBN’s Director of Banking Supervision, Mohammed Abdullahi at the end of the Bankers’ Committee’s meeting reportedly disclosed: 

“It is wrong to say the deductions are fine because the banks are not losing the money to the CBN. The only implication is (that) the amount debited would not be invested in money market instruments by them. Once the affected banks raise their lending to the deposit threshold, their accounts will automatically be credited. 

 “CBN never said there is going to be a fine. The circular said at the cut-off point in the event of banks not meeting the threshold, funds would 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 the CBN. It is going to be a continuous process.” 


Note: An earlier version of this article described the deduction as a fine. This has now been corrected as a “penalty”. 

 

 

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Coronavirus

COVID-19 Update in Nigeria

On the 5th of March 2021, 371 new confirmed cases and 3 deaths were recorded in Nigeria

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Covid 19 update symptops

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 158,042 confirmed cases.

On the 5th of March 2021, 371 new confirmed cases and 3 deaths were recorded in Nigeria.

To date, 158,042 cases have been confirmed, 137,025 cases have been discharged and 1,954 deaths have been recorded in 36 states and the Federal Capital Territory.

A total of 1.54 million tests have been carried out as of March 5th, 2021 compared to 1.49 million tests a day earlier.

COVID-19 Case Updates- 5th March 2021,

  • Total Number of Cases – 158,042
  • Total Number Discharged – 137,025
  • Total Deaths – 1,954
  • Total Tests Carried out – 1,544,008

According to the NCDC, the 371 new cases are reported from 20 states- Lagos (101), Rivers (54), Anambra (31), Ebonyi (23), Imo (23), Kwara (22), Kano (20), Taraba (17), Akwa Ibom (16), FCT (15), Abia (13), Kaduna (13), Osun (5), Edo (4), Oyo (4), Kebbi (3), Ogun (3), Ekiti (2), Nasarawa (1), and Zamfara (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 56,374, followed by Abuja (19,328), Plateau (8,939), Kaduna (8,623),  Oyo (6,761), Rivers (6,651), Edo (4,645), Ogun (4,419), Kano (3,830), Ondo (3,066), Kwara (2,953), Delta (2,582), Osun (2,449), Nasarawa (2,248), Enugu (2,078), Katsina (2,060), Gombe (2,010), Ebonyi (1,951), Anambra (1,811), Akwa Ibom (1,588), and Abia (1,568).

Imo State has recorded 1,551 cases, Borno (1,297), Bauchi (1,232), Benue (1,188), Adamawa (942), Niger (917), Taraba (863), Ekiti (825), Bayelsa (779), Sokoto (769), Jigawa (496), Kebbi (401), Cross River (334), Yobe (288), Zamfara (221), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

Governor Babajide Sanwo-Olu of Lagos State announced the closed down of the Eti-Osa Isolation Centre, with effect from Friday, 31st July 2020. He also mentioned that the Agidingbi Isolation Centre would also be closed and the patients relocated to a large capacity centre.

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Due to the increased number of covid-19 cases in Nigeria, the Nigerian government ordered the reopening of Isolation and treatment centres in the country on Thursday, 10th December 2020.

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On 26th January 2021, the Federal Government announced the extension of the guidelines of phase 3 of the eased lockdown by one month following the rising cases of the coronavirus disease in the country and the expiration of phase 3 of the eased lockdown.

On 28th February 2021, the federal government confirmed that the first tranche of Covid-19 vaccines will arrive in Nigeria on Tuesday, March 2nd, 2021.

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READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

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Hospitality & Travel

MMA2 imports new x-ray machines from US

MMA2, Lagos took delivery of new x-ray machines ordered by Bi-Courtney Aviation Services Limited (BASL) to upgrade its facilities.

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The Murtala Muhammed Airport, Terminal 2, Lagos has taken delivery of new x-ray machines ordered by Bi-Courtney Aviation Services Limited (BASL) to upgrade its facilities on Friday.

This was disclosed by the Group Corporate Affairs Manager of BASL, operator of MMA2, Mikail Mumuni, in a statement on Friday.

He said, “The equipment imported from the US arrived the Murtala Muhammed International Airport, Lagos Wednesday night from where they were later moved to MMA2.

”Installation of the x-ray machines and air conditioners will commence on Friday evening and that this would be completed within one week.”

The BASL spokesperson quoted the acting Head of Business of the company, Mr. Ralph Uchegbu as saying that “the installation of the new X-ray machines and air conditionals will further reinforce the status of MMA2 as the nation’s pre-eminent airport terminal in terms of customers security and comfort.”

What you should know

  • BASL recently announced that it had invested over $500,000 massive upgrading of its X-ray machines and air conditioning systems for passengers safety, security and comfort.

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