The Lagos Chamber of Commerce and Industry, LCCI, yesterday, said banks should grant one-year moratorium and six months interest rate concessions on all credit facilities, effective from March 2020, following the Coronavirus (COVID-19) pandemic that has adversely impacted businesses.
The Director General of LCCI, Dr Muda Yusuf, in a statement on business and economic sustainability proposition against the current COVID-19 pandemic, said, to make this possible for commercial banks, the chamber would also seek a review of the Cash Reserve Ratio, CRR, from the current level of 27 per cent to 20 per cent.
This, he said, would give room for the banks to offer the interest rate concession and moratorium on loans, adding that, commercial banks should take a cue from the gesture of the Central Bank of Nigeria, CBN, on the interest rate cut and moratorium granted on its intervention funds.
According to a report by the PUNCH, Yusuf said good credit regime is critical to the sustainability and progress of an economy, adding that the palliatives announced by the CBN in response to the pandemic are commendable.
But he stated: “There is the bigger issue of private sector indebtedness to the commercial banks.
As at December 2019, banks credit claims on the private sector stood at N15.2 trillion. The way this exposure is managed will be very crucial to the realization of the economic and business continuity outcomes in the Nigerian economy.
“It is imperative for the commercial banks to take a cue from the central bank and offer some reprieve to their customers on existing facilities. It is gratifying that at a recent meeting of the Bankers Committee it was resolved among other things ‘that profit will not be the primary motive at this time, rather preserving confidence, financial stability, and support for the economy will be overriding objectives.
“We would like to see windows of opportunities for loan moratorium, restructuring of facilities, refinancing, and interest rate concessions in the light of the unprecedented downturn in the economy.”