Average Nigerians may resort to keeping their money at home as Deposit Money Banks in Nigeria begin to increase the minimum account balance for individual customers. www.mannastores.com
An investigation by our correspondent revealed that, though only one of the banks had been bold enough to make the plan public, some others were still in the process of finalising their plans.
Some of the banks, according to findings, are increasing the amount that must be left in individuals’ accounts at any point in time to reduce the crowd in their banking halls, in line with the Central Bank of Nigeria’s move towards a cashless economy. Others, it was gathered, were only doing so to retain enough funds for other business.
Already, the United Bank for Africa Plc has informed its customers that, with effect from July 1, 2011, the required minimum balance for savings and current account holders will be N25,000.
Our correspondent gathered from an official of the bank that the idea was to move account holders from the regular accounts to card accounts.
The official, who craved anonymity because he was not permitted to speak officially, added, “The N25,000 is the amount you need to leave in the bank at any point in time. Ninety per cent of the crowd you see in the banking hall do transactions below N25,000. For you to maintain this set of people, you need to spend and deploy a lot of resources.
“These transactions can be done outside the banking halls through e-banking. So we just want to move them to the platform of e-banking.”
Though officials of the corporate affairs department of UBA said they had not received approval to react to the issue as at press time, the notice in the bank’s banking halls read, “Dear esteemed customer, please be informed that, with immediate effect, the new minimum opening balance for savings and current account is N25,000.
“Meanwhile, all existing customers of the bank are, therefore, advised to increase their savings and current account balances to N25,000 minimum, on or before July 1, 2011. Thank you for banking with UBA.”
It was also gathered that some banks that had not increased their minimum account balance had also set high cash requirements for the opening of new accounts.
For instance, when our correspondent visited branches of Zenith Bank Plc, the officials of the bank said an individual could not open savings or current accounts with less than N25,000.
A top official of one of the “strong banks” confirmed to our correspondent that the bank was planning to increase the minimum account balance for customers, from the current N1,000 to between N10,000 and N20,000.
He said, “The N1,000 minimum balance has been there for a while. We have a lot of dormant accounts in the bank now and this can only be curtailed by increasing the minimum balance a customer can leave in his or her account.
“It’s not something that will require an approval from the regulator. If you think this is the way your business can favour you, then the regulator cannot blame you for that. It’s not like you are charging the customer extra money. It is still their money.”
Experts have, however, said that, with the new N18,000 minimum wage, the banks are only saying that banking is not for the poor and that “Nigerians should be keeping their money at home.”
Some customers, who spoke to our correspondent on Wednesday, said that the CBN should monitor the banks’ operations as regards the minimum account balance demanded from customers.
“I think it’s a wrong move at this time when people are still trying to build their confidence in the banking industry. Where do you want people who earn as low as N20,000 to keep their money? The banks are indirectly saying that some people should not come to the banks to save again,” a customer of one of the banks, who identified himself as Segun Adeniji, said.
A financial analyst with Civic Investment Limited, Mr. Thomas Adenuga, however, said that the move had its merits and demerits.
“Any bank that increases its minimum balance unjustly will definitely lose its customers to other banks. However, that is not to say that there may be no justification for the increase. Currently, there are a lot of unbanked people, who still don’t have bank accounts. What the banks should be doing is to promote savings culture and not increasing minimum balance,” he argued.
An independent, professional and non-profit organisation conceived by the United Kingdom’s Department for International Development, Enhancing Financial Innovation and Access, had said that 79 per cent of Nigeria’s adult population were unbanked.
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