The banking sector in a bid to comply with the Loan to Deposit Ratio directive of the Central Bank of Nigeria gave out the sum of N860bn to various sectors of the economy.

The loans were given to the private sector within a three months period 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 meeting held at the headquarters of the CBN was attended by Managing Directors of all the Deposit Money Banks as well as Chief Executives of regulatory agencies from the financial sector.

Present at the media briefing were the Director, Banking Supervision Department, CBN, Ahmed Abdulahi; his counterpart in the Corporate Communications Department, Isaac Okorafor; and the Chief Executive of Stanbic IBTC Bank, Demola Sogunle.

The Group Managing Director, Zenith Bank Plc, Ebenezer Onyeagwu and the Managing Director, CitiBank Nigeria Limited, Akin Dawodu, were also present at the media briefing.

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

Faloye said the N860bn loan was given to finance the private sector in line with the directive of the CBN to banks on the 60 per cent Loan to Deposit Ratio.

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 have been able to see N860bn 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 call a credit clause default clause that allows us to set off the obligations of a defaulting party against any other monies that that defaulting party has in the industry.”

Also speaking on the response of the banking industry to the LDR policy of the apex bank, Sogunle said banks had been able to grow aggregate credit to the economy by 5.5 per cent within the three-month period.

He said, “It is important for us to bear in mind the positive part of that policy. The banking industry was able to respond positively within a period of three months to the policy of the CBN in terms of making credit available to the generality of the economy.

“We should not take it for granted that banks within that period of three months were able to grow the aggregate credit by almost 5.5 per cent. If you annualise that, it is very significant.”

On the N499bn that was reportedly deducted from 12 banks as fine for failing to meet the LDR, the committee said the deduction was not fine.

When asked for clarification on the issue, the Zenith Bank GMD said, “These efforts have been successful so far and to continue to improve the banks’ ability to play our intermediary role in the economy even better than we have done in the past.

“Let me take on the issue of the debiting of banks, CBN never stated that the debits were fines.

“If you go back to the circular, what it said was that at the cut-off point, in the event that you don’t meet the threshold, funds would be set aside from you and added to your Cash Reserves Requirement.

“So what you have there is not a fine neither is it a levy but it’s just for the parameters that CBN had set.”

He added that the exercise would continue.