Cole: Banking tears in a cashless society (2)
I ASKED the lady when last she saw an utility bill (they mean NEPA, water or telephone land line bills), she told me that she was only carrying out CBN instructions. This was a lady who was my accounts officer for the past five years in the bank. There was another gentleman who suffered the same fate and in exasperation, asked that the bank close the account. Sorry, the lady said to him, I cannot close your account until you bring (you guessed it) utility bills, identity card, etc!! What really got this man angry was that he had naturally brought his passport. But the passport had expired a few days before – yes, you guessed it; it was not a valid identity card because the passport had expired!! The man was so furious he asked the lady whether she was bent on frustrating him – his passport had all the details she needed to confirm details that the bank already had. You cannot close a dormant account; you cannot reactivate a dormant account without going through almost the same process as opening a new account.
Does CBN or Ministry of Finance, or National Bureau of Statistics or anyone else have a record of dormant accounts? Has anybody asked? Under what heading will this be in the audited accounts of the banks? The practice is that all such accounts are entered in a suspense account at the end of each year. But this gets very complicated if the account is old. My mother had a number of such accounts. When I applied that these accounts be transferred to me, the bank first told me to go to the branch where my mother had the accounts. On further inquiry, the branch had been closed, the system of numbering accounts had changed over five times in the last 30 years; the central office of the Bank claimed that they had no record of these deposits and in fact refused to acknowledge that the deposits were theirs. My lawyers told me that a debtor is freed of his obligation to pay if after seven years he has received no request to meet his obligation. This is not the place to deal with the concept that the law is an ass but you can imagine how many heartbreak stories exist in Nigeria. Is this not a case for legislation and for the creation of a financial ombudsman? We should also have an entry in the books for dormant accounts in the banks’ books.
More fundamental is the attitude of the bank. Who closed the branch? Whose primary duty it was to make sure that proper records are kept? If the bank has been acquired by another bank, did they not do a reconciliation? Why is the bank adopting a hardline policy when in actual fact they should be seen to be doing their utmost to help legitimate claimants of moneys left in trust for them by our ancestors? Where is their fiduciary obligation? From the above it is evident that the fiduciary responsibility of the banks; of NDIC, are observed more in the breach than in compliance. That these difficulties were not foreseen when the banking licences were given and or when NDIC was set up boggles the mind. The estimate of money in dormant accounts is well over 200 billion Naira.
CBN is now setting up a Personal Verification Number for each customer. What happens when the account holder and his PVN (Personal Verification Number) is dead. Or a son finds his mother’s PVN 10 years or 20 years after her demise? A wife or the man’s mistress or vice versa?
Incidentally all banks ask their customers to fill in a next of kin named and address attached to each account? Do these statements naming next of kin mean nothing? Or do they have the force of a will? In my experience, only one bank bent over backwards to meet its obligation in a similar case. That was FCMB.
A few months ago I had some U.S. dollar bills which I tried to pay into my domiciliary account in Lagos. The bank would not take any dollar bill dated 2003 or before. I asked why and was told this was a CBN directive. I went to London with the same bills and the banks were happy to accept them. Who gave out such instructions and why? The same thing happened with regard to £50 notes, which banks refused here in April/March last year. The banks in the UK had no problem accepting these notes. So what is really happening?
I asked a senior official at the CBN why foreign banking notes were being rejected. He told me that CBN has the right like any Central Bank to reject any currency’s notes; and that he thinks that when CBN sent these notes to the Federal Reserve Bank in the U.S., the Bank there rejected the notes. He also thinks this maybe in pursuance of the U.S. policy to chase moneys used to encourage terrorism.
What is the solution for rural banking? Obviously people who use to live in these villages on getting to Abuja are transfixed to the glare of the lights, like an animal transfixed by the light of an approaching car!!! The animal looks and stops and is killed. These societies are being killed by the oil industry and further deadened by silly regulations about so-called cashless society and other ancillary rules about dormant accounts. Those who make these rules come from these areas but somehow forget that they have to go back someday. How many banks are in Ogoni land, especially near the oil wells?
When Bayelsa was first created, there was only one petrol station and one bank in the whole state. Today, I do not know how many banks are in Bayelsa but they are not many. The answer of the banks will probably be that little business is done in villages, but if the economic revolution is going to come, it will be with agriculture and will necessarily involve villages.
Nothing humbles a Nigerian more than his going to his bank and he is petrified that he would be unable to get his money because of one regulation or the other. If he gets his money, the smile of satisfaction is indeed something to behold.
• Ambassador (Dr.) Cole (OFR) is a Consultant to The Guardian Editorial Board.