Bank customers have continued to express concern over the poor services they receive and the need for bank authorities to urgently do something about it. Agreed, banks are not the most popular institutions in legend and in reality, but that does not mean that customers should not get their money’s worth. In many parts of the world, banks are seen as shylocks. This explains why the goal of banking supervision over the ages is to sanctify the banking institutions so that they profit not from rent, but from their roles as financial intermediaries. In so doing, their interests will mostly coincide with the best interest of the society they serve.
The poor image that banks have in Nigeria derives, in the first place, from the fact that historically, their interests and fortunes have been at variance with those of the society they serve. In the early days of banking, Nigerians held it against the dominant expatriate banks that they were not willing to finance ingenuous businessmen and women. This was a leading motive for the establishment of the earliest banks namely: African Continental Bank, ACB, National Bank, Agbomagbe Bank, to name just a few. In time, the various regional and state banks were to perform similar roles for their states and people. Today however, such banking models has proved defective and largely abandoned.
Nonetheless, the indigenous business sector continues to feel deprived of bank funding and assistance. The average Nigerian is in need of finance and finds no explanation for the inability of his bank to aid him the way overseas’ banks help their customers. The defect comes from our financial system but until it is adequately addressed, the public will feel justified in holding the inadequacy against the banks.
The public has good reasons to hold banks and bankers responsible for their misery. Every day in the media, they are treated to pictures of senior bankers, Governors of the Central Bank, Bank chairmen and Chief Executives meeting with, dining and wining with Presidents, Senators, Governors and creme de la creme of society. Surely, the public imagines, “… if the bankers want to, they can improve our lot. They have the opportunity to tell our leaders what our problems are with the aim of drawing their attention to it, so that they can solve them…” It would not take long for the public to conclude that the banks care only for themselves;
as the public will point to the fat profits that banks are making and declaring in these hard times as evidence of their selfishness.
There are other reasons why banks have the sort of image they have in Nigeria. Some years ago, when Dr. Joseph Sanusi, was the chairman of the FITC, Financial Institutions Training Centre, he was concerned about the poor image of banks and had asked some experts to speak on the matter. They drew his attention to the fact that in the past decade the economy had confronted many burning issues all of which would have a major impact on the future. Some of these were Structural Adjustment, Privatization, Monetisation, Devaluation, Industrialisation, Deregulation and Liberalisation. They challenged him to identify the position taken by banks in each of these matters and to contrast such with what was eventually done. On closer observation, it was discovered that in every single case, Nigerian banks took positions at variance with positions that would promote the best interest of the society.
In the mid-nineties, Nigerian banks, together with Nigerian industrialists, argued for higher interest rates and for higher exchange rates and against capital market reforms. But the question is: Why would industrialists be calling for higher interest rates when it favours only banks?
The result of the wrong choices that Nigerians have collectively made is that our economy suffers; and with it, all of the people. Banks should not expect their customers and indeed, the banking public to like them when they have not used their endowment and resources to achieve a better society. More than anything else, this is what the banks owe the country! Some charity will help. But how much employment will charity provide? How many mouths will charity feed? The small scale entrepreneurs need financial assistance and it is another opportunity for banks to engineer the country proactively and redeem their dwindling image. Banks should equally redefine their lifestyle and keep to banking codes and ethics. In addition, faulty operating systems such as Automatic Teller Machines, ATM, Point of Sales, POS machines and other e-banking platforms must be made functional and responsive. Until the banks achieve a more efficient financial system for our nation, their poor image will subsist; every other thing they do, will be window dressing.