Reform In Banking Sector Responsible For Increase In Dormant Accounts– Financial Expert

By Ikenga Chronicles June 25, 2018

Financial experts have blamed the steady rise in the number of inactive bank accounts to the various reforms in the banking sector.

Chief Executive Officer, Motion Yield Limited, Mr. Aboidu Oyelaja, who stated this in an interview with Vanguard, said he expects the steady increase to persist.

Recall that the Nigeria Interbank Settlement System (NIBSS) revealed that the number of inactive bank accounts rose by 1.6 million or 4.3 percent to 38.3 million in the first quarter of 2018 (Q1’18) from 36.7 million in fourth quarter of 2017 (Q4’17).

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In his reaction, Oyelaja said: “The trend is expected to continue due to the reforms in the banking sector and government activities. Customers are beginning to realize that they do not need to have multiple accounts in different banks again. Once a bank account can handle all transactions across banks, there is no need to incur avoidable charges that come with multiple bank accounts.

“In addition, the awareness of the capabilities of the BVN is also a factor. Customers are now more aware that transactions carried out by them get recorded against them and accessible by all other banks irrespective of the bank used for such transactions. Many who have been using several accounts have had to close such accounts or abandon them outrightly for fear of being traced to such accounts in the future.

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Oyelaja noted that measures taken by government to deal with perpetrators of financial crimes alongside banks reviewing their platforms to discourage fraudsters would also lead to further increase in the number of inactive bank accounts.

He stated: “Furthermore, the activity of the government on prosecution of those engaged in financial crimes is a contributory factor. Many accounts opened for such activity are being and will be abandoned by those engaged in such activity.

“Also, the tightening of the policies and procedures of banks are also contributory factors. Banks are discouraging customers from using their platforms to perpetrate fraud. They are continuously reviewing their platforms with a view to discouraging and exposing fraudsters.

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“In general, I believe the trend will continue and in my opinion, it is a good development for the banking industry as well as the country.”

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