Lust for sudden wealth and lack of knowledge by larger percentage of the Nigerian population have sustained the intractable problem of “wonder banks”.Way back to the 1970s, Wonder banks and pyramid schemes have come in different forms and shape disappearing with its bust and later reappearing to bloom.They have lured NIgerians with mouth watering profits/interest rates beyond the range of commercial banking tempting many to part with their hard earned money.The resultant trauma to unsuspecting NIgerians have forced financial sectors regulators to increase the enlightenment tempo and taking sustained actions against their operations.One of such was the directive in the past from the Central Bank of Nigeria (CBN) to banks to submit the account details of 28 fake finance companies/ fund managers also known as wonder banks.Corporate Affairs Commission CAC followed suit in 2013 by deregistering about 30 of them which had defrauded Nigerians about N106 billion.
Director of Research and Policy of the Nigeria Deposit Insurance Corporation, NDIC, Jacob Afolabi on Monday noted that despite the several warnings “the activities of these category of people have continued due to greed and the gullibility of some members of the society”
He wondered why would someone agree to invest N1 million and expect N400,000 return at the end of the month.
“Why don’t you think within you and ask what kind of business will the man do within one month that he will make so.much profit to pay you half a million interest on you N1 million.
“Again there is the problem of gullibility. Many of our people are very gullible. Otherwise , you should know that there are some offers that are too good to be true.”
Afolabi regretted that the ‘wonder banks” don’t usually say out as deposit takers. Rather, he said that they usually register as investors and that are such operate outside of the purview of both the NDIC and the Central Bank of Nigeria.
To curb the practices, NDIC is now insuring the pool accounts of Mobile Money Operators to ensure the safety of their subscribers.
Under this strategy, all subscribers would be entitled to up the insured deposit of N500, 000 in the event of failure of any Deposit Money Bank in which affected MMOs have their deposits.
“In the event of bank failure the NDIC would unveil the pool account of the MMM and each subscriber would be.treated as if the e – wallet account was held directly in the bank.
“The good thing about it is that if the MMM account were to be treated on it individual basis it would entitled to a maximum deposit insurance cover of N 500, 000. But the strategy we have adopted, each subscriber with the MMM would be entitled to N500, 000 if they have as much in their e – wallets”, Afolabi noted.
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