…As banks link 41m accounts to BVN
For fear that their deposits with commercial banks may become target of the Federal Government’s onslaught against corruption, an estimated two million account holders with various financial institutions may have abandoned their accounts over the last two years.
This development has eventually led to a drop in the number of active bank customers from 61 million to 59 million as at the end of 2017.
According to statistics from the Nigeria Inter-Bank Settlement System (NIBSS), the number of active bank accounts also reduced by 1.5 million, from 65 million to 63.5 million from 2016 to 2017.
Figures obtained from the NIBSS website on Sunday, showed that the total number of bank customers dropped from 61 million in 2016 to 59 million in 2017. According to NIBSS, the banking sector, however, made great strides in linking customers’ account using the Bank Verification Number (BVN) during which some of the accounts suspected to have been funded with slush funds were unveiled.
The report, for instance, also showed that linked BVN accounts grew from 26 million in 2016, to 41.3 million in 2017 despite the initial resistence by customers. According to a banking industry source, the reduction in banking customers is not unconnected to the Federal Government’s declaration to fight against corruption.
“When Buhari assumed office, many people abandoned their accounts, especially civil servants, because of fear of investigation. While some outrightly closed down their accounts, others opted for gradual withdrawal so as not to raise the alarm,’’ a source said.
The source, who works at one of the top five banks in the country, blamed the BVN for the low patronage of banking products, especially in the rural areas, where awareness was already very low.
“First of all, the interest rate paid by banks is next to nothing, so there is little reason to keep your money at the bank when you can turn it over doing other businesses,” a customer said.
Another customer, who preferred to remain anonymous said he opened several accounts during the Ponzi scheme boom in the country, but was forced to abandon them after the schemes crashed in late 2016 and early 2017.
However, a source at the CBN said the reduction in the number of banking customers was caused mainly by the introduction of BVN.
“The reduction may not necessarily be a bad thing. For example, many people opened accounts using different names.
“So with the introduction of BVN, such customers were forced to regularise their names. However, some opted to close down their accounts, which resulted in the reduction of active bank accounts and customers,’’ the source said.
The CBN source was, however, optimistic that the financial inclusion strategy of the bank would succeed in bringing in more people into the formal banking system.
The financial inclusion is a strategy aimed at ensuring that bulk of the money in the economy remains within the banking sector.