Lagos -The are indications that Nigerian banks are now awash with liquidity and can now lend huge funds at their disposal to deficit sectors of the economy.

Mr Mustafa Chike-Obi, Managing Director of the Asset Management Corporation of Nigeria (AMCON), said that with liquidity ratio, standing at about 70 per cent, banks should begin to play their intervention role in the economy.

“What is needed is to create bankable projects and products in power and infrastructure, for instance,” Mr Chike-Obi said.

Obi spoke at the second annual Pan-African one-on-one Investor Conference organised by Renaissance Capital (RenCap) in Lagos.

Dr Sarah Alade,  Deputy Governor (Economic Policy) of the Central Bank of Nigeria (CBN),  said that banks now preferred lending to government instead of the real sector.

“In terms of interest rate being high, when government borrows money, offering banks higher rates than the private sector can offer, banks naturally lend to government,” she said.

Mr Segun Agbaje,  Acting Managing Director of Guaranty Trust Bank, lent credence to the improving health of the banking sector when he said that normal banking activities would resume soon  after the various reforms in the sector.

Agbaje said that banks were been careful in lending to ensure quality loans were given out  while customers  were also concerned on the kind of projects they invest borrowed funds on.

He said the banking industry had recovered substantially from the financial crises that rocked the financial sector globally in 2008 which had ripple effects on the Nigeria economy.

Abaje said that Nigerians would get used to CBN’s directive limiting daily withdrawals from banks to N150, 000 for individuals and N1 million for corporate bodies.

But an ICT expert, Mr Valentine Obi, has advised the NCC to prevail on telecom operators to ensure more efficient service delivery for the success of CBN new policy on cash withdrawal.

He said that the time was ripe for Nigerians and the economy as whole to reap the benefits of a cashless society.

“Cash transactions may not die completely, but we are going to see the reduction of cash transactions, therefore Nigerians should embrace the policy,” he said.

He said credit growth in the sector may increase by about 10 per cent this year and rise to 20 per cent over the next five years, which he said, would be a boost for the economy. (NAN)