By Sunny A. Ijomah
The Nigerian Economy has started recovering from the three-month-long Naira scarcity but there is another brewing risk of a possible banking sector collapse as customers shun cash deposits.
The development is a spill-over effect of the Central Bank of Nigeria’s poorly implemented Cashless Policy which caused Nigerians untold nightmares and hardship.
However, CBN’s massive evacuation of banknotes to commercial banks on March 24, 2023, has served as the antidote to the currency crisis challenge, though many Nigerians describe the move as late.
But the respite looks short-lived, following a heightened tension of banks’ insolvency amid customers declining steam to deposit cash and conduct other transactions.
It has been gathered that Nigerian banks’ assets rose by 10.72 trillion Naira ($22.61 billion) between August 2021 and August 2022 to hit 66.76 trillion Naira ($151.49 billion), according to CBN’s data.
Meanwhile, Adaeze Okolie, a resident of Abuja, said, ‘I no longer feel the need to deposit my money with the Bank; I rather keep it. The Naira scarcity period did expose the inefficiency of Nigeria’s Banking System. It was appalling, I could not withdraw for months, and online transactions were equally frustrating. Many Nigerians have learnt their lessons.’
Also, Usman Abdullahi, a yam seller at Suleiman Market, said he would rather keep his money than go to the bank to deposit cash or better look for other means.
A POS operator in Utako Market in Abuja, Augustine Chukwu, said, ‘I collect cash from market men and women; I rarely visit the banking hall.’
But Abdul Imoye, the Head of Media Relations at Access Bank PLC, confirmed the decline in cash deposits by customers and said the apprehension held by Nigerians for not depositing cash would soon be a thing of the past.
According to him, the current situation was typical of the Nigerian mentality, even as he believed that business would bounce back in time.
‘It is due to the Nigerian mentality; customers had struggled with cash scarcity for months, so people are normally apprehensive. But now there is cash in the banking system; I am sure things will return to normal,’ he said.
Also, the CEO of SD & D Capital Management, Mr Idakolo Gbolade, said bank customers’ behaviour towards cash deposits was a natural resentment.
‘The bank customers will naturally shun depositing their funds and deposit is expected to decline due to the experience of depositors in the past few months.
‘Bank customers went through hell to make withdrawals from their deposits, so it is natural for resentment regarding depositing their funds back to the banks.
‘This trend will continue for months before depositors adjust accordingly.
‘The economy will gradually bounce back with cash infusion into the system,’ he stated.
Last Month, Nigerian Deposits Insurance Corporation, NDIC, with the primary responsibility to protect depositors, reaffirmed that it was committed to ensuring a solid banking system in collaboration with the CBN.