Deposits in other banks will now be used to settle loan defaults - CBN
- The CBN says deposits made in other banks will be used to settle loan defaults, henceforth
- The decision was reached by the apex bank, in agreement with commercial banks in the country
- According to the CBN, the directive is in order to encourage banks to increase lending
Deposits made in other banks will be used to settle loan defaults, the Central Bank of Nigeria (CBN) has agreed.
The development was made public by the CBN’s deputy governor, financial services system, Aishah Ahmad, while addressing journalists after the Bankers Committee meeting on Monday, August 26, The Cable reports.
Legit.ng gathers that the decision was reached by the apex bank, in agreement with commercial banks in the country.
Ahmad said the directive was in order to encourage banks to increase lending.
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The CBN previously ordered commercial banks in the country to give out 60percent of deposits as loans.
The apex bank, in a letter, said that any bank which failed to act according to the directive would be punished by having their cash ratio increased.
In the letter signed by Ahmad Abdullahi, the director of banking supervision, the CBN said the aim of the order was to improve the economy by encouraging more investments in the real sector.
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Source: Legit.ng
