Nigerian banks are reportedly experiencing shortage cash of
following massive spending by various political parties in the country
on election campaigns.
The massive withdrawal of cash from Deposit Money Banks by politicians and their associates in preparation for the general elections has resulted led to shortage of cash across bank branches in the country.
Punch reports that several billions of naira had left the banking system between December last year and this month as different political parties spent huge amounts on their campaigns.
“Many banks are having it rough in terms of liquidity. Huge deposits running into several billions of naira have been withdrawn for election campaigns by politicians. This has affected some of the banks. So, liquidity issue is of utmost concern right now,” a top official of a tier one bank says.
According to other sources close to the situation, some lenders have had to postpone some obligations due to liquidity problems.
“Banks have been calling and pleading with some investors not to terminate maturing fixed-income debts as a result of liquidity problems; some bankers are also not lending not necessarily because of uncertainties in the economy, but due to lack of liquidity,” a banker added.
A number of politicians, he said, have also sold their properties below the real values in a bid to raising funds for campaigns.
Punch visited some bank branches in Lagos and Ogun states on Wednesday and Thursday, and observed that hundreds of customers came to withdraw money from their accounts more in anticipation of problems during and after the presidential election on Saturday.
However, many of the customers were disappointed because they could not get the amounts they requested across the counter and Automated Teller Machines (ATM)
Bank officials said some customers were making panicky cash withdrawals to make provision for their families in case of security problems after the elections.
A bank official told Punch that it was a sign of liquidity problem for banks to keep giving excuses of network breakdown and employ delay tactics to force some of their customers to leave in frustration without being unable to make withdrawals.
According to experts, Nigerian bonds are expected to rise as the country prepares to hold the presidential election on March 28.
The massive withdrawal of cash from Deposit Money Banks by politicians and their associates in preparation for the general elections has resulted led to shortage of cash across bank branches in the country.
Punch reports that several billions of naira had left the banking system between December last year and this month as different political parties spent huge amounts on their campaigns.
“Many banks are having it rough in terms of liquidity. Huge deposits running into several billions of naira have been withdrawn for election campaigns by politicians. This has affected some of the banks. So, liquidity issue is of utmost concern right now,” a top official of a tier one bank says.
According to other sources close to the situation, some lenders have had to postpone some obligations due to liquidity problems.
“Banks have been calling and pleading with some investors not to terminate maturing fixed-income debts as a result of liquidity problems; some bankers are also not lending not necessarily because of uncertainties in the economy, but due to lack of liquidity,” a banker added.
A number of politicians, he said, have also sold their properties below the real values in a bid to raising funds for campaigns.
Punch visited some bank branches in Lagos and Ogun states on Wednesday and Thursday, and observed that hundreds of customers came to withdraw money from their accounts more in anticipation of problems during and after the presidential election on Saturday.
However, many of the customers were disappointed because they could not get the amounts they requested across the counter and Automated Teller Machines (ATM)
Bank officials said some customers were making panicky cash withdrawals to make provision for their families in case of security problems after the elections.
A bank official told Punch that it was a sign of liquidity problem for banks to keep giving excuses of network breakdown and employ delay tactics to force some of their customers to leave in frustration without being unable to make withdrawals.
According to experts, Nigerian bonds are expected to rise as the country prepares to hold the presidential election on March 28.
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