By Tony Obiechina, Abuja
Bank Chief Executives (CEOs) under the auspices of the Nigeria Bankers’ Committee said they have increased lending to bank customers including retail finances and mortgage loans by N860 billion within the last eleven weeks.
Briefing the media at the end of their meeting held at the corporate headquarters of the Central Bank of Nigeria, (CBN), in Abuja on Thursday, the CEOs also clarified that the N499 billion debited 12 banks which failed to meet the 60 percent lending deposit ratio at the end of September was not a fine.
The Bank CEOs who briefed the media include. Mr Akin Dauda of Citi Bank and Mr Ebenezer Onyeagwu of Zenith Bank PLC.
They explained that in addition, the cost of electronic banking transactions will only reduce when the number of smart phones increase in the country.
“Bankers’ Committee was particularly delighted that there is an increase in the flow of credit to preferred sectors of the economy as a result of the policies of CBN that compels banks to raise their LDR to at least 60 per cent before the end of September 2019. However, the Committee has been able to secure CBN support in guaranteeing recovery of loans.
“We are mindful of the fact that there are some vulnerable sectors that we would be lending to. It is important for us to make sure that we mitigate our risks and have a credit fault default clause that allows us to set off the obligations of defaulting party against any other monies that defaulting party has in the industry.
“It is important for all of us to include that provision in our loan agreements and the CBN is supportive in ensuring that where there is a need for us to enforce that clause, it would be enforceable.
“On deposit ratio compliance, the industry was satisfied with the results in terms of increasing lending by N860 billion which is significant in an 11-week period. It was the result of collaboration of all the banks with the regulator in terms of buying into the vision to increase corporate credit in the economy and retail credit with a view to helping support growth and the investments in the economy.
“All the banks were aligned in the objective and did everything they to increase the ratio and aggregate on an overall basis, this effort has been successful so far. “The idea is to continue to work, to expand and improve this and to continue to improve the banks ability to play our intermediatory role in the economy even better than we have done in the past.
A representative of the Bankers who spoke on the N499 billion said “what CBN did was not to fine the banks. The process is that CBN debited banks directly at a particular date but that is the commencement of a point in time. “The next thing we are going to see is that CBN would be looking at a figure because it is an ongoing process. It is not just a one-stop process.
“If for instance, your particular loan to deposit ratio didn’t meet the threshold but it meets it subsequently, CBN is going to look through the process and make sure that the required reforms are made effectively. Everyone of us is committed to achieving the target set for December at 65%.On the high cost of charges on electronic payments the committee “USSD is a critical element within the context of financial inclusion.
“It is critical because in Nigeria, we’ve got over 70 percent of mobile handsets as feature phones and not smart phones. “And for you to be able to use mobile devices for financial transactions you will need USSD. “The pricing has been discussed robustly and the idea is that the cost for USSD should continue to reduce. “When it trend downwards then we will be able to extend financial transactions to the 40 percent of adult population that are currently financially excluded. “We will be able to bring them into the financial system if we price of the services of USSD continues to drop.”
