Nigeria banking sector risks collapse as customers shun cash deposits

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, had served as the antidote to the currency crisis challenge, though many Nigerians described 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.
Track news gathered that Nigerian banks’ assets rose by 10.72 trillion nairas ($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 in Suleiman Market, said, “He would rather keep his money rather than go to the bank to deposit cash or better look for other means”.