Total customer deposits in 11 Nigerian banks rose to N41.18 trillion at the end of the first quarter of this year from N39.48 trillion in December 2021, their unaudited financial statements have shown.
The increase represents 4.31 per cent or N1.70 trillion reported by the commercial banks in the period under review.
The banks are Zenith Bank Plc, Access Holdings Plc, Stanbic IBTC Holdings Plc, Guaranty Trust Holding Company Plc, United Bank for Africa Plc, Ecobank Transnational Incorporated, FCMB Group Plc, Wema Bank Plc, Fidelity Bank Plc, Unity Bank Plc and Union Bank of Nigeria.
This development runs contrary to expectations following the launch of the Central Bank Digital Currency (CBDC) which the International Monetary Fund had said may function as a deposit at the Central Bank of Nigeria and consequently reduce demand for deposits in commercial banks.
The eNaira, which was launched on October 25, 2021, is the digital equivalent of the physical naira as well as the same naira with far more possibilities, according to CBN.
Like digital currencies elsewhere, the eNaira carries risks for monetary policy implementation, cyber security, operational resilience, and financial integrity and stability, IMF asserted in its report, titled ‘Country Focus; Five Observations on Nigeria’s Central Bank Digital Currency.
“For example, eNaira wallets may be perceived, or even effectively function, as a deposit at the central bank, which may reduce demand for deposits in commercial banks. Relying as it does on digital technology, there is a need to manage cyber security and operational risks associated with the air,” the Washington-based fund stated.
Findings from the unaudited financial results of the banks show that Zenith Bank pooled the highest figures in customer deposits, rising to N7.25 trillion in March from N6.47 trillion in December 2021.
Access Holdings grew its customer deposits to N7.49 trillion in March from N6.95 trillion at the end of last year, while that of UBA increased to N6.65 trillion from N6.37 trillion.
GTCO had customer deposits of N4.05 trillion as of March 31, up from N4.01 trillion at the end of 2020. Customer deposits in Fidelity Bank increased to N2.07 trillion from N2.02 trillion in the review period, while that of FCMB rose to N1.57 trillion from N1.55 trillion.
Stanbic IBTC grew its customer deposits to N1.20 trillion from N1.13 trillion, while deposits in Wema Bank and Unity Bank increased to N1.01 trillion from N927.47 billion and N378.52 billion from N322.28 billion respectively.
Customer deposits in Ecobank, however, decreased to N8.195 trillion from N8.36 trillion, in the review period, while that of Union Bank also declined to N1.31 trillion from N1.36 trillion.
Addressing a delegation of Executive Directors from the Bank of Uganda, who was on an experience sharing tour of the CBDC project last week, the CBN Governor, Godwin Emefiele promised that the apex bank would achieve the 85 per cent financial inclusion rate target, in a very short period from its current rate of slightly below 70 per cent.
Emefiele stressed that the CBDC would enhance the relationship between mobile banking and e-business and speed up the rate of financial inclusion.
The eNaira will allow the over 200 million Nigerian population to experience the full benefits of the global digital economy and help reduce the influence of informal and cash-based economies among other issues.
“The e-Naira is expected to deepen financial inclusion by bringing more people into the financial space, support a resilient payment ecosystem, reduce the cost of processing cash, enable direct and transparent welfare intervention to citizens, increase transparency in revenue and tax collections, facilitate diaspora remittances, reduce the cost of financial transactions and improve the efficiency of payments,” CBN Director of Corporate Communications, Osita Nwanisiobi, had highlighted.
However, there are worries over the consistency of CBN’s rules and unanswered questions on the digital currency as the Nigerian government faces a tough path to making the eNaira a success, experts and cryptocurrency users have observed.