14 banks suspend operation in Kogi over harsh government policy

Piqued by the Kogi State Government’s new policy, stopping patronage of some banks in the state, 14 commercial banks yesterday, suspended services to customers as a form of protest.

The Guardian findings revealed that the affected commercial banks took the decision in protest against the state government’s decision to open unsolicited salary accounts for civil servants in Zenith and Access Banks.

The action, it was gathered has put the affected banks in difficult situation, who lamented that the decision would make it difficult for them to recover their facilities from civil servants who hitherto banked with them.

Many customers were stranded when they came to do business at their various banks yesterday, as they were turned back, leaving only Access and Zenith Banks attending to civil servants.

The organised labour had earlier embarked on strike on Monday over alleged “imposition of strange and unsolicited salary bank account on workers by the government in utter disregard to established civil service rules.”

Other grievances leveled against the government include, “imposition of new PAYE regime on workers, non payment of salaries to local government workers, pensioners, core civil servants and non implementation of 100% minimum wage to primary school teachers.”

When The Guardian went round the capital city the banks; GuarantyTrust, UBA, Sterling, Fidelity, First Bank, EcoBank, Union, WEMA, Skye Banks, Diamond, FCMB, Unity and Stambic IBTC were all under lock and key.

Customers with their ATM cards queued up to try withdrawing from the machines that were bogged down by network issues.The combined strike of labour and the commercial banks has practically grounded both government and commercial activities in the state.

A customer in one of the banks, Joel Usman said the strike was justifiable on the grounds that a lot of civil servants whose salary accounts were in those banks had collected facilities using their salary accounts as security or collaterals with the knowledge and consent of their employer.

At a forum recently where the issue came up, Governor Yahaya Bello explained that the bailout fund received by state governments was the result of the Federal Government standing surety for them to approach deposit money banks for facilities.

In other words, against the generally held impression that the Federal Government has always doled out these funds from its coffers, it essentially provided a guarantee for the loan facility to would-be lenders, in favour of the state government.

According to him, “Due to the prevailing economic situation, cash reserves of commercial banks domiciled with the Central Bank of Nigeria, were currently competing for so many pressing needs simultaneously, making it increasingly difficult for the 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 remain domiciled in their banks.”

The organized labour had directed workers to stay away from work. But in defiance, investigations showed that workers reported for duty and signed the mandatory attendance register ordered by government.

The Commissioner of Information, Muhammed Away Imam disclosed at the secretariat that the workers came to work, adding many of them were suffering from divided loyalty.