By Anayo M. Nwosu
Mr. Owodi was so shocked when one of his subordinates raised her hand after he had finished reeling out the new deposit targets for individual staff as directed by the head office.
“Sir, I don’t mean to be rude”, Miss Egwuatu, the subordinate, asked “could you please teach or hint us on how we can generate from our customers, these kind of deposit targets you have given us given the economic situations in the country?” Miss Egwuatu had taken the question out of the mouths of all the other unit heads present. Mr. Owodi had a ready-made answer:
“Just like I need to suggest to Management on how to continue paying your salaries with dwindling revenues from banking operations. The target is sacrosanct and must be met; otherwise, the Management would do the right thing. But be assured that before I’m sacked as the regional manager for nonperformance, I would have sacked all of you, the unit heads. Our future is tied together. Just go and meet the targets. The meeting is over!”
Mr. Owodi thundered as usual, expecting the unit heads to leave his office. From the old generation banks to the newly licensed, the story is the same. The customers are not bringing their deposits to the banks in the volumes the bankers desire. The few deposits available are being pursued or pitched by many bankers. Where are the deposits? This is a hard question that even the deposit targets givers cannot answer or are refusing to answer. The young bankers should know that the deposits the bank customers leave in the banks are broken down into the following:
1. Monthly federally allocated revenues to states (FAAC), those for the local governments (JAC) and other receipts from federation accounts.
2. State and local governments’ internally generated revenues (IGR).
3. Funds meant to pay state contractors but delayed and kept in banks to help friends and relations in the banks to meet targets or for pecuniary benefits for government officials in charge.
4. That portion of revenues or income remaining after customers had made must-do payments or purchases.
5. Money being saved by bank customers towards projects which could be to buy a property or to pay school fees.
6. Salary and other benefits accrual accounts of the states and local governments.
7. Other projects accounts by states and local governments.
8. Sales proceeds yet to be used to make purchases or applied in production.
9. Deposits received into the bank which are to be used to execute contracts like Advance Payments for contract jobs.
10. Proceeds of crime like drugs, kidnapping and corruption.
11. Funds from Organizations like NGOs, Schools, Clubs etc.
The Bank’s Management wants each marketer to have average daily balances equivalent to assigned targets or more. Consistent achievement of the deposit targets leads to the promotion of the staff involved while the consistent nonperformance within three appraisal cycles leads to a sack. While a performing staff may not be promoted upon meeting the assigned deposit targets for one reason or the other, the non-performing staff referred to as a laggard is surely sacked.
The tragedy is that most states and local governments cannot presently cover their recurrent expenses not to talk of having positive bank account balances. In fact, their accounts are usually in deficit when their borrowings of yester-months or years are deducted from their monthly federal revenues receipts and internally generated revenues. Most states now consolidate their funds in one bank and as such, limiting the capacity of other banks nay marketers to meet their targets through them. So sad!
Another bad news to bankers is that, after draining the banking sector of the federal government’s ministries, departments and agencies deposits which are now banked with the central bank, the federal government have also jumped into the arena to compete with banks in mopping up deposits. Most large volume bank depositors now prefer high yielding treasury bills and bonds issued by the Federal Government. The Federal Government borrows through Treasury Bills and Bonds to meet its short and long term financial needs and the rates at which they offer their instruments these days appeal more to bank customers. This has led to reduced capacities of banks to lend more money.
The inability of governments at all levels to settle debts owed local contractors which are in trillions of naira or to undertake new infrastructural projects that would warrant payments through the banks have made matters worse. The twin problem of delayed payments of local contractors, non payments of salaries and wages of workers in the public sectors have now reduced the capacity of the larger population to make purchases of goods and services produced in the country. This simply translates into poor sales across the target markets of bank customers. It is double tragedy that while the borrowing customers have not been able to repay their loans as at when due, the depositing customers would need to withdraw their money as per want or need. The banks have no options but to maintain sufficient deposit levels to meet the non-borrowing customers’ withdrawal demands, otherwise it would be deemed as illiquid or failed.
Every banker knows that deposit is the oxygen of a bank. More or huge deposits guarantee the sustenance of a bank. A Nigerian bank doesn’t have to lend to customers to make profit. Yes! Do not ask me “how”. It’s a trade secret. Given the dwindling business fortunes of most bank customers and the push by the banks to replace deposits lost to FG’s Treasury Single Account (TSA), the battle for deposits by banks in Nigeria is becoming very fierce. Clearly, majority of salary earners have no leftover to save. They save their salaries and allowances before receiving them. Therefore, no banker should plan to meet deposits targets from salary earners except from those of blue chip companies, politicians and corrupt civil servants.
Key Distributors Financing in banks is dying owing to falling customers purchasing index nationwide. Hence, following the money via value chain is becoming a broken record. There are high inventories of unsold goods financed through bank loans leading to bad loans. Customers repay bank loans when they make sales. “Which importer would lodge deposit with a bank that cannot provide the elusive foreign exchange?”, a distraught banker would constantly ask himself. Ability of a bank to provide FX for importers now determines how much deposits the bank gets from this segment of their customers.
There is no emotion here. Give me dollar and I will move naira to you! While some bankers are still lucky with huge deposits from big companies and high net worth individuals, many others are not. The unlucky ones are being sacked even as new technologies or automations are rendering many bank operations staff jobless. Cashless Banking, ATMs and Internet Banking have combined to sack hundreds of note counting staff, across the counter staff, and many Funds Transfer officers in Nigerian banks. It is now much easier to find a virgin on the streets of Abeokuta or Owerri than to get enduring deposits from non-government entities. They rather ask for loans which banks cannot do.
Like most bank supervisors that would just hand down the targets as received from executive management, Mr. Owodi would never give a hint to his direct reports on where to look for the deposits or how to meet the targets. His own was to demand for reports on performance and to dish out threats. Lanre and Okey need to keep the job and, as such, must find a way to trudge on. They plan to become universal Christians worshiping in all denominations to trap deposits from super rich churches while Ndifrke and Labaran decided to focus on medium and large scale farmers in their areas of operations.
But Mr. Adeniyi, one of the unit heads serving under Mr. Owodi, had an idea on how to achieve his target. He planned to open accounts for many senior EFCC operatives, senior police officers and customs officers. He reasoned that the privileged security officers and those they deal with (who are mostly politicians) could help him meet his targets. How Mr. Adeniyi intends to achieve his huge deposit target via his coded plan is best known to him.
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