Following various initiatives carried out by the Central Bank of Nigeria to turn the country’s financial space around, the vision of the financial watchdog appears to be a mirage as the 22 million Nigerian adults with bank accounts still have reservations about the system, ADEMOLA ALAWIYE writes

The sight was baffling! A well dressed lady was seen begging almost all customers going into the branch of this particular bank for help. Could she be one of those who have turned themselves into corporate beggars or was her circumstance special?

Mrs. Folashade Ogunlade, a customer of one of the banks the Central Bank of Nigeria classified as ‘too big to fail’ did not leave the curious customers guessing for too long as she complained bitterly about the bank’s operation as she could no longer proceed on a planned trip due to system downtime.

Ogunlade said she had planned to withdraw some money from the Automated Teller Machine before proceeding for a trip outside Lagos for an important family outing but got stuck when the ATM could not dispense cash. To make matters worse, she tried using her ATM card in another bank’s machine and it swallowed her card.

She approached the bank’s Customer Care Officer and explained how urgently she needed to retrieve her card back but she was told to check the bank branch where her account was domiciled in a couple of days.

Because she needed to travel that day, Ogunlade went to the bank trying to withdraw money over-the-counter but she was told she needed to come with her customised withdrawal booklet. She was stranded and needed to go back home to get her withdrawal booklet, hence the need to turn herself into what people refer to as corporate beggar.

“I can’t believe I will go through all these problems just to withdraw the money I used my hands to save in the bank. I tried to talk to the bank’s workers maybe they will understand my plight but they won’t just reason with me; some of them are just too rude to spend one minute talking to you,” she lamented.

Ogunlade’s case is one example out of the many challenges bank customers face trying to gain access to their hard earned money on a daily basis.

Mr. George Cole, a businessman, said he used to believe so much in the e-payment method until he paid twice for some goods he bought while on vacation in another state using the Point of Sale machine.

Cole in an interview with our correspondent said he was debited thrice for a single transaction, and all efforts to get a refund proved abortive as he was frustrated to leaving the money.

He said, “I was on vacation outside Lagos State and I went to a store to buy some goods worth N25, 000. I’ve always been an advocate of the cash-less policy; so, when I got to the counter, I requested to pay with my card. They had three machines there and none of them was working well. The lady told me to pay with cash but I refused as some of these store cashiers prefer customers paying with cash so as to get tips.

“I used my card on the first PoS machine and it declined; we tried the second machine and the same error message appeared; it was on the third attempt that the transaction became successful. I did not receive alerts on my registered telephone number; so, when I got back to Lagos days after, I realised my balance was inaccurate.

“I went to the bank and I was shown my transaction history and it appeared I paid thrice for the goods I bought. I called the store and they told me they would have to check with their bank. After series of fruitless calls, I gave up.”

A lot of people have abandoned their bank accounts as a result of various challenges they have encountered in the process of carrying out transactions. It was gathered that no fewer than 23.8 million Nigerian adults currently keep their money at home because they don’t have bank accounts.

A survey by Enhancing Financial Innovation and Access, a Nigerian-based financial sector development organisation, revealed that 52.8 million out of the country’s adult population saved money regularly. But the survey showed that only 20.5 million of this number was doing so in banks.

This, according to experts, confirms a widely accepted industry statistics that there are about 22 million bank accounts in the country.

The report, released recently, also found that majority of the 23.8 million people, who kept money at home, were doing so with friends, families or through informal society or village associations.

It further revealed that the main reasons why those people did not have bank accounts were irregular income, unemployment and distance to bank branches. It added that bank proximity was of great concern to the rural population.

It, however, stated that 9.7 per cent of the 23.8 million people viewed the whole banking process as expensive, while 8.3 per cent lacked trust in the system and the remaining 5.8 per cent stayed off the formal financial system because of their apathy for documentation.

Following the global financial crisis that started mid 2008 and which had an adverse effects on the oil and gas sector and the financial markets, series of initiatives were introduced by the CBN and the banks.

Although some of the initiatives have been yielding positive results, others have failed to achieve the desired results. In some cases, the initiatives have brought more problems to the system and created hardship for the people.

Scores of bankers have lost their jobs as a result of sharp deterioration in the quality and liquidity constraints across the banks. The sector has witnessed a lot of breadwinners losing their jobs. The lucky ones, who have managed to retain their jobs, have had their salaries slashed over and over.

Investigations showed that over 7,500 bank workers lost their jobs after the special audit test carried out by the CBN and the Nigeria Deposit Insurance Corporation, which showed that nine banks were in a “grave situation.”

It was also gathered that all the banks, especially the bridged banks, adjusted their salary structures, with some of them cutting the salaries by 100 per cent.

Also, the cash-less policy introduced by the CBN to promote the use of electronic transaction and reduce the volume of cash in the economy, has also come with its problems. It is evident that more bankers have lost their jobs as the banks had earlier unanimously endorsed an initiative proposed by the CBN to reduce their expenses through a drastic cost-trimming strategy in line with the new payment regime.

Sources in the Bankers’ Committee, which comprises chief executive officers of the CBN, Nigeria Deposit Insurance Corporation, discount houses and the banks, told our correspondent that the bankers in one of their meetings agreed to cut down the operating expenses by as much as 30 per cent, starting from 2013.

The CBN had earlier directed the rescued banks to cut executive and other staff emoluments by at least 30 per cent. The CBN Governor, Mr. Lamido Sanusi, had at the beginning of the reform process expressly admitted that there would be job losses but the question then was whether it would be on a net basis.

A memo from the CBN had directed the banks to immediately submit action plans for branch and staff rationalisation in order to “utilise some hidden economies of scale” in their operations.

The banks, according to the memo signed by Mr. Thompson Sunday on behalf of the Director of Banking Supervision, CBN, were also required to submit their action plans for enhanced revenue generation and cost reduction.

The memo added, “Furthermore, we request that you take the following steps immediately to check the dwindling operating performance of the bank: immediately reduce executive and other staff emoluments by at least 30 per cent and submit an action plan for branch and staff rationalisation in order to utilise some hidden economies of scale in the bank’s operations.”

Some experts, who spoke with our correspondent, berated some of the policies of the central bank, saying that a good economic policy should not improve the welfare of some people, while leaving others worse off.

A consulting economist, Mr. Adedayo Toluwase, said, “In Nigeria, we are fond of making policies that affect some people positively and at the same time inflict pains on other people. A good policy should not make a set of people better off, while making others worse off. In welfare economics, when some people are affected negatively in the course of changing a policy, then there is need to reconsider the policy.”

Speaking in the same vein, a labour expert, Mr. Charles Anenih, said the number of job losses in the banking sector was becoming alarming.

He added, “Job losses in the banking sector have risen more than any other sector of the economy. It’s unfortunate that people who are supposed to be protecting the workers in the banking industry are the ones calling for a reduced workforce.

“A lot of people have been thrown out of work without payment of benefits. Till today, some people have not recovered from the shock they experienced as a result of their job losses.”

The Chief Executive Officer, Fatrax Securities Company Limited, Dr. Wale Ositelu, said although the cash-less policy had good intention, there were a lot of challenges hindering its implementation.

He said, “I strongly believe the cash-less policy is for the good of the economy. However, there are a lot of unnecessary expenses that are carried out by banks on a daily basis. A lot of people are paying for the inadequacies of the system. This should not be so.”

Some bank workers, who spoke with our correspondent, condemned any initiative that would further trim the salaries or the workforce in the sector.

A professional banker in one of the rescued banks, who pleaded not to be named because of the sensitive nature of the issue, told our correspondent that there was serious anxiety in the industry as the New Year approached.

He said, “Everybody is scared right now because we do not know what the New Year has for us. Particularly, for us in the bridged banks; we do not know what will happen after the sale is concluded. I started as a graduate trainee some years back with a net monthly salary close to N200, 000. Presently, my salary is less than N100,000. I thank God for my situation because some people who came in together with me were told to go for no reason.

“It has become so obvious that they may ask some people to go. When you ask top management staff if people will be sacked, they will shy away from the question, while some will tell you that the normal thing will be done for the bank to continue in operation. ”

Miss Peju Adewunmi, who worked in one of the healthy banks before she was told to resign, said, “It’s not only the rescued banks that are sacking and cutting salaries. I was told to leave because they wanted to reduce the number of staff in our branch. I never had a query in my file throughout my two years in the bank. But my boss had to sacrifice me because we were just two professional staff in my department.

“It was not as if our bank was one of the rescued banks and we were not doing badly at all. But they still told some people to go. Generally, I think they are just trying to reduce the workforce in the banking sector, which is having adverse effects on people’s lives. There are no jobs out there.

“Since I lost my job last year, I’ve not been able to get another job. I’ve tried looking elsewhere but experience is knocking me out. The banking sector used to be one of the major contributors to the economy in terms of reducing unemployment rate and poverty level.”

A contract employee in one of the banks, who simply identified himself as Michael, said it had got to the level where employers in the banking sector should no longer consider cutting salaries.

According to him, the salaries are at a subsistence level.

“For some of us who were not employed directly by the bank, the salary level now is just to keep one alive. Any further cut in the salary will amount to people doing awkward things like defrauding and stealing from the bank,” he noted.

Michael lamented that there were other ways to cut expenses than cutting workers’ salaries and sacking staff.

He said, “We have two different categories of workers in most of the banks, even the so called international banks. We have professional or full employees and we have the contract workers. The professional members of staff, in most cases, are employed by the banks, while the contract workers are employed by some other recruitment agencies.

“There is wide variance in their salary structures depending on the bank. In some cases, we have a difference of more than N100,000. At a point in time, we were earning N72,000, while the full staff members were earning N180,000.

“If they think they are spending too much on the workers, then they can make everybody professional employees and peg the salary at a reasonable rate. Amazingly, the contract employees work more than the professional ones because all they do is just authorise transactions. There should be a review of the laws governing recruitment in the banking sector. Another name for contract employment is slavery.

“As a contract worker, you cannot think of saving for the rainy day because you can hardly meet your needs. Personally, I spend half of my salary before receiving it. As a banker, you meet people on a daily basis and you need to look good; that does not come with the stipend we earn as contract workers. Most of the people working as contract workers are of poor parentage, while the rich kids get into the banks as full staff.”

Reacting to this, the Director, Corporate Affairs Department, CBN, Mr. Ugo Okoroafor, said, “I want you to understand something. It is not for us to tell the banks to lay off staff; these are private entities that make money. People invest in those businesses; it may look like they are sacking people but at the end of the day, everybody will enjoy a better financial system.

“It has been proven that the more sophisticated your financial system is, the better it impacts on your Gross Domestic Product and your economy will grow.”

On the challenges of poor connectivity and other e-payment problems, Okoroafor said, “Even in America, they have issues too. I mean it is not a destination, it is a journey. We are happy with what we have seen so far and the banks are working so hard and deploying more PoS terminals. We are also working on connectivity.”

Okoroafor agreed that there were so many challenges but said, “We are surmounting the challenges. We are a monetary authority and not responsible for connectivity but we are working with all the relevant authorities. It’s not something we will do overnight.

“I keep telling people that the revolution in the telecoms industry took place because Nigerians were ready to embrace it; and that’s why we moved from 400,000 lines in 2001 to 120 million lines today. And that is what we are seeing in the cash-less policy.”

Also reacting, an official in the Corporate Services Department of Guaranty Trust Bank Plc, Mrs. Oyinade Adegite, said, “We are aware of the issues we have in our branches; so, we’ve longed embraced the cash-less policy. What we did immediately the cash-less policy started was to deploy all available e-channels.

“We’ve given out many PoS terminals to a lot of merchants so that they can be relieved of cash handling. Although we know it has not solved all the problems.”

Source: Punch