Nigeria’s economy has begun to recoup from the three-month naira shortage, but a new danger of a potential banking sector collapse as customers avoid cash deposits is growing.The change is a result of the Central Bank of Nigeria’s badly executed Cashless Policy, which brought on countless hardships and nightmares for Nigerians.
Although many Nigerians thought the CBN’s huge transfer of banknotes to commercial banks on March 24, 2023, was tardy, it had been the antidote to the currency crisis problem.However, the respite appears to be fleeting after a rise in tension over banks’ insolvency and a decline in consumer demand for cash deposits and other transactions.
According to CBN statistics, the assets of Nigerian banks increased by 10.72 trillion naira ($22.61 billion) between August 2021 and August 2022, reaching 66.76 trillion naira ($151.49 billion).
Abuja resident Adaeze Okolie said, “I no longer feel the need to deposit my money with the Bank; I prefer to retain it. The period of Naira scarcity did reveal the shortcomings of Nigeria’s banking infrastructure. It was terrible; I was unable to transfer funds for months, and dealing with businesses online was difficult. Many Nigerians have gained wisdom.”
A vendor in Suleiman Market named Usman Abdullahi added, “He would rather keep his money rather than go to the bank to deposit cash or better look for other means.”
Augustine Chukwu, a PoS worker in Abuja’s Utako Market, stated: “I collect cash from market people; I rarely visit the banking hall.”
However, Abdul Imoye, the Head of Media Relations at Access Bank PLC, confirmed to reporters the drop in customer cash deposits and stated that Nigerians’ concerns about not making cash deposits would soon be history.
He claimed that while what is occurring right now is typical of Nigerian mentality, company would eventually recover.
It’s because of the “Nigerian mentality,” where people are typically wary because they’ve been struggling with currency shortages for months. But now that the financial system has money, I’m confident that things will get back to normal,” he said.
The Nigerian Deposit Insurance Corporation, NDIC, which has the primary duty to safeguard depositors, reaffirmed last month that it is committed to working with the CBN to ensure a strong banking system.