Can Nigerians bank on their banks?

The current run on Nigerian banks came from multiple sources, but mostly because the banks failed to provide leadership in a crisis situation. The unfortunate dimension that it took came because the banks lack a template for handling this kind of emergency. When cash is low in the vault, how should a bank respond? Apart from about two or three banks, most of them displayed gross unpreparedness for this. 

Institutions are known more for their ways of doing things in all situations. This defines them and gives an institution an identity far greater in value than fine buildings and all the branding packages that its media managers can put together for it. 

This identity is invariant with the management or leadership at any point in time. It is the culture that has accumulated over time and thus a company’s publics or stakeholders can bank on this identity, knowing that in any given circumstance, its actions will be guided by the company’s ways of doing things. 

In the case of a bank, this identity should run through the entire organisation, from the CEO down to the cleaner. It is the culture that would have been developed over time. It should be the same at the corporate head office and be replicated at all branches. And part of that culture is a discipline that serves a gatekeeping function, determining what is acceptable and what is not.

CBN to withdraw POS operators license over high charges

CBN to withdraw POS operators license over high charges

How do banks handle emergencies, such as the abnormal times that we have witnessed in the past two weeks or so? The banks send tons of text messages to their customers for the minutest issues, especially when it involves a charge for one thing or the other. But when the crisis started, how many of the banks sent such messages to their customers explaining how they would handle the crisis and perhaps the amounts that customers would be able to withdraw at a time? 

The events of these past few days have raised questions as to whether Nigerians can really bank on their banks. Or, is it just a question of banking with a certain bank in good times, when they are comfortably trading with your huge balances and earning high interest incomes on those funds, but only giving you pittance in the name of interest on your funds? But these days, people’s experiences have perhaps shown them that the banks are more interested in your money, not in your welfare. 

The banks have damaged or wounded the trust that a lot of Nigerians put in them. This is a self-inflicted wound, and it will take a long time for this trust to be rebuilt. While we are trying to reach the unbanked, the banks have unwittingly unbanked the banked. Many bank customers who have gone through harrowing experiences have sworn that they would have nothing to do with the banks again after now. 

While the current crisis really has many elements to explain it, the banks clearly have a lot of explanations to offer to their customers and Nigerians in general, who have been wounded psychologically, emotionally, and even socially. Many Nigerians, who had emergencies, including health issues, could not meet up with their financial obligations. 

These past few days have revealed to us the truth (perhaps already known) that our problem in Nigeria is not technology. Our experiences have shown us that we as Nigerians can sidetrack technology and still do what we want to do and perhaps get away with it. 

We have ATMs, but an ATM cannot dispense money if it is not loaded with currency notes. And not just loaded with money, but loaded with money the right way. There was a story of a bank’s ATM being set ablaze by customers (or mob) with the new currency notes loaded into it but with the notes still wrapped. If that story is true, it means that we are yet far from this century that is technology-driven. 

It has taken threats to get the banks to dispense the available notes in some places. Professor Babagana Zulum, Governor of Borno State, who has been in the trenches more than any other governor in the country, had to threaten to revoke their land titles if they failed to dispense the available cash in his state. 

One of the anti-graft agencies was after them and reported a case it stumbled on where cash was stashed away in an unusual place in the bank. So did another agency. There have been reports of bank officials being caught with large sums of the new naira notes, while millions of their customers and other Nigerians are falling over each other, some stripping in banking halls, all in an effort to withdraw money from their own accounts. 

On this score, many of Nigeria’s banks have proven that their customers can indeed bank with them but may not necessarily bank on them. As Jim Collins says in his seminal book, GOOD TO GREAT, “It takes discipline to say ‘Thank you’ to big opportunities”. In the current situation, some bank officials saw the crisis as an opportunity to make quick money and they fell for it. We have read the claim by ACAMB, the group of banks’ spokesmen, that the banks were not hoarding the new notes. But Nigerians have seen on camera a strong room where the new notes were carefully packed behind the old notes until inquisitive investigators came around. Perhaps there is another name in banking terminology for what many of the banks were doing. And why did they shy away from refuting the stories about some senior bankers being caught with the new notes? Why were they silent on such weighty issues? 

We have seen a video showing staff at a bank branch scaling over the wall of their premises, behind the building, and away from the maddening crowd at the entrance to safety. We have also seen banking halls being turned into boxing arenas, in one case between two customers, as tensions flared up. We have seen men and women stripped inside banks. What more can Nigerians go through? 

As the rumblings continue over this policy, our banks would realise that one way or the other, they have made and lost customers. Those who did well will retain their customers and even gain new ones who will definitely migrate. Others will return to the drawing board. Each bank already knows where it stands right now.