By Peter Egwuatu

Shareholders in the banking sector in Nigeria are lamenting over the declining revenue of banks in 2021, attributing it to high operating and borrowing cost, among others.

The shareholders under the aegis of Independent Shareholders Association of Nigeria, ISAN said:” That banks interim reports in 2021 shows poor revenues following high operating cost and higher borrowing costs as Cash Reserve Ratio, CRR hike further complicates banks currency flow already hit by fallout from Covid-19 and the oil price shocks.”

The ISAN, after its emergency meeting held in Lagos resolved that: “The CRR is a forced replication of what the  AMCON earlier did in the banking sector where six commercial banks paid N155.45 billion into an idle sinking fund between 2015 and 2017. Banks also have continued to pay.”

Briefing newsmen in Lagos , ISAN    emeritus National Coordinator, Sir Sunny Nwosu said: “That    the AMCON January 1, 2011, sinking fund agreement with banks  requiring CBN to contribute N50 billion and banks an equivalent of 0.5percent of their total assets as annually for ten years has elapsed on January 2, 2021.

“ That continuous contribution of a non-refundable levy to AMCON by all banks in Nigeria, in spite of the difficult business operating environment without ownership interest, rights or obligations on the contributor amounts to institutional scam.

“That ISAN which had previously opposed the sinking fund, still opposed the failed policy project and urged the federal government to liquidate AMCON and enhance shareholders returns and the economy.”

He further explained that: “As retail investors, ISAN suggest either a reduction of CRR to about 15 percent or pay three percent interest on the restricted banks deposits. 

That the continuous debit of banks under the CRR is putting the banking sector under serious threat and a compelling impotency toward sustainable intervention in the real sector.

That the 27.5 percent CRR impact on active 4.9 million retail shareholders have resulted into dismal dividends, banks’ net interest income and the general economy.”

While commenting on recommendation to move the financial sector and economy forward, Nwosu said :” ISAN specifically submit that the only way out of the CRR logjam foisted on banks and to avert policy incapacitation of national economy is for CBN to pay interest on banks mandatory deposits.

  “We urge CBN to seriously have a rethink on CRR and among other things to enhance the performance of the financial sector of the economy.    The challenge character of Nigerian economy makes it imperative for CBN to pay interest on restricted deposits.

That current banking industry squeeze has also created further national economic challenges in the face of dwindling earns of Nigerians and declining remittances.”