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Nigerian central bank levies 500B naira fine on 12 lenders, including Citigroup

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Nigerian central bank levies 500B naira fine on 12 lenders, including Citigroup

The Nigerian central bank fined 12 lenders operating in Nigeria — including Citigroup Inc. — a combined 500 billion Nigerian naira for failing to comply with its mandate of increasing their loan-to-deposit ratios to 60%, Bloomberg News reported, citing a circular sent to the banks.

Banks in the country were given a Sept. 30 deadline to boost the ratio, in a drive to increase lending to the economy, and the 12 lenders failed to meet it. Out of the six largest lenders in Nigeria, only Access Bank PLC hit the minimum threshold by June-end, according to the report.

There are concerns over the long-term sustainability and performance of these loans despite their short-term benefits in creating jobs, the report said. However, Nigeria has further increased the threshold to 65% from 60% as it looks to resuscitate economic growth and has set a December-end deadline for it.

Some of the lenders hit by the fine, in order of magnitude, are Zenith Bank PLC with a 135.6 billion naira levy, Citigroup with 100.7 billion naira, United Bank for Africa PLC with 99.7 billion naira, FBN Holdings PLC unit First Bank of Nigeria Ltd. with 74.7 billion naira, Standard Chartered PLC's local unit Standard Chartered Bank Nigeria Ltd. with 30 billion naira, Guaranty Trust Bank PLC with 25 billion naira and FCMB Group PLC with 14.4 billion naira, according to the circular seen by the newswire.

The lenders will transfer the funds, which will be taken from the cash reserves held at the central bank, to non-interest bearing accounts at the Central Bank of Nigeria.

As of Oct. 2, US$1 was equivalent to 361.79 Nigerian naira.