The Central Bank of Nigeria (CBN) on Wednesday announced a reduction in the Loan-to-Deposit Ratio (LDR) of banks in the country to 50 per cent.
The LDR is used to assess a banks liquidity by comparing a banks total loans to its total deposits within the same period.
According to a circular signed by Adetona Adedeji, Acting Director of the Banking Supervision Department, the adjustment, mirroring the recent increase in the Cash Reserve Ratio (CRR) for banks, aims to align the LDR policy with the current monetary tightening measures undertaken by the CBN.
