Nigerian Bank Nigeria CBN Central Bank Of Nigeria – Demise Of Structural Banking Imminent, Says CBN

Source: Compass, March, 2011

In the very forseeable future in Nigeria, the idea of a bank with massive structure housing men and women in trendy suits and other paraphenalia that graces the structure will be a thing of the past. The era will be replaced by the golden era of paperless banking that will ride on the crest of technologies which will be driven largely by cards.

Nwanji Eik, analyst, payment system dept of the Central Bank of Nigeria (CBN) who recently spoke in Lagos declared that the end of the road was near for structural banking, adding that it was in pursuant to encouraging the large pool of the excluded in the banking sector that the regulator issued licences to firms that will provide banking services to their customers in ways that are not conventional.

According to him, the CBN has been doing a lot in the area of solving the problem of fianancial exclusion, arguing that 3 Line Card Management Limited which unveiled its Freedom Network to usher in a new dawn in street banking, had demonstrated that it had the skill and all it takes to roll out such services in the country.

He said the scheme had succeeded in Kenya, Russia and Brazil promising that the apex bank would continue to support firms wishing to roll out initiatives that will bring the large number of the unbanked to the mainstream.

Eik said apart from the fact that structural banking had failed to live up to expectation, it is also too expensive to operate, stressing that the CBN’s decision to introduce polymer notes in the country is due largely to the “expensive” nature of managing cash because it is also subject to wear and tear.

Butressing the CBN’s position on structural banking, Nuhu Adams, executive director, Finbank, said branch banking is too expensive. He said 3 Line street banking initiative will provide opportunities for the unbanked to be banked.

Mrs Funke Ade-Ojo, general manager, 3 Line Card Management Limited, in her remarks, lamented that after a century operation of conventional banking service in the country, less than 50 per cent are integrated into the system. She said it was the realisation of this and the desire to bring the unbanked into the system that the firm launched the street banking initiative.

The firm explained that the Freedom Network’s approach to bank the informal sector of the economy, especially the underbanked is through the use of point of sale/ point of service (POS) devices to provide universal service, adding that access to financial services, light banking services will be done through street banking.

Nigerian Bank Nigeria CBN Central Bank Of Nigeria