Banks worried over low cash deposit by customers

FEAR has gripped Deposit Money Banks (DMBs) that low deposits from their customers could limit their ability to lend and offer credit to boost production and investments.

A Bankers’ Committee member confirmed that the banks have been threatened by what he described as lack of interest to “return difficult-to-get cash into the banking system.”

The cash crunch triggered by the implementation of the naira redesign policy encouraged many Nigerians to abandon the banking culture.

The banker said: “It is not really desirable if cash is not deposited in the banks, either across the counter or through electronic transfers. It means money supply will be reviewed beyond what is optimal and that can affect lending.

“The ability of the commercial banks to create money, lend money for production purposes, for investment purposes, even for consumption; people borrow money to buy personal goods and services; all that will be affected.”

The senior banker attributed the weak desire to return cash to banks to the loss of confidence in the system, saying it was “as a result of a decline in confidence in the system, the fear that cash shortage will continue.”

He added: “Those who are not traditional hoarders are also keeping the cash at home, but at some point, when more money is in circulation, normalcy will return to the banking system”, he said.

The banker, who pleaded anonymity, said the lack of interest in depositing cash is part of the uncertainty arising from the scarcity of cash in banks, following the introduction of the cashless policy by the Central Bank of Nigeria (CBN).

However, he expressed optimism that confidence was gradually being restored in the banks and commercial sector.

Proffering a solution, the banker urged the CBN to “sustain its tempo of releasing more notes, both new and old into the system, saying definitely, customers will gradually regain confidence in the banking system”.

The Managing Director/CEO SD&D Capital Management Limited, Mr. Gbolade Idakolo, said: “The 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 there to be resentment as regards depositing their funds back to the banks.

“This trend will be on for some months before depositors will adjust accordingly. The economy will gradually bounce back with the infusion of cash back into the system,”

The staff of some commercial banks in Abuja told The Nation ”that deposits are coming in trickles, most come only to withdraw”.

Another scenario playing out daily in the banking halls is the crowd of bank customers who besiege the customer care unit of the banks. Most of the angry customers visit the Customer Care unit to complain about one failed transaction or the other.

Olasimbo Akinsiku was at her bank to demand for the reversal of several debits allegedly posted against her account for failed airtime purchases amounting to N8, 000. She left the bank with assurances that the payment would be reversed.

Another customer whose N13, 100 had been stuck between her bank and a gas retail station, said she’s being lodging complaints at her bank since February 11 to have her money returned, but she said nothing has been done so far.

At the last Monetary Policy Committee (MPC), CBN Governor Godwin Emefiele, apologised to Nigerians for the glitches they experience in the course of using alternative payment channels.

Since his apology, many Nigerians have been weary of engaging in electronic transactions and some banks’ Automated Teller Machines (ATM) cards are notorious for their failures.

(FROM: THE NATION)