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How 14 Banks in Kogi State Suspended Operations

fourteen banks in Kogi state protested by suspending services to customers as the state government stopped patronising several banks operating in the state. Commercial banks decided to halt customer operations in protest against government’s decision to open unsolicited salary accounts in Access Bank and Zenith Bank. The creation of salary accounts in both Access and Zenith banks, exclusively, would mean that other commercial banks in the state effectively lose their civil service accounts.

Yahaya Bello, the Kogi State Governor, explained that this action was the Federal government’s way to stand by deposit money banks offering them facilities. “Due to the prevailing economic situation, cash reserves of commercial banks domiciled with the Central Bank of Nigeria (CBN) were currently competing for so many pressing needs simultaneously, making it increasingly difficult for banks to finance loan facilities especially long term ones.”

“Access and Zenith banks were, however, able to step up to the plate when the state approached them. They made the first tranche of the state’s bailout funds available, but on one condition. The condition was that the funds remained domiciled in their banks,” said the governor at a recent forum.

The commercial banks that were able to finance the federal governments debt are, in essence, rewarded for their ‘patriotism’ but this decision inadvertently punishes other commercial banks. The protesting banks complain that customers took out bank facilities using their salary accounts as collateral with the knowledge and consent of their employer, but these investments are put at risk with the new government policy. Banks may view the measure as a punitive one by the government against the backdrop of accusations made by top officials of the ruling party. Members of the All Progressive Congress (APC) recently accused banks of trying to undermine the efforts of the administration by laying off thousands of workers, revealing the friction between the banking sector and the party. The protest coincides with the labour strike in the state over the imposition of the Pay As You Earn (PAYE) scheme, non-payment of local government workers and the non-implementation of 100 percent minimum wage to primary school teachers.

ALSO READ  Nigeria Records Its First Baby Born From Frozen Egg

Customers have suffered a loss due to the protests; experiencing long winding ATM queues with the machines bogged down by network issues. The combined protest and labour strikes is reported to have grinded both commercial and government activities to a halt.

Source: Ventures

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