9Mobile and Banks: Should we be worried about our money?

by Alexander O. Onukwue

N541bn: That was the amount owed by Etisalat Nigeria to ten commercial banks who were involved in the company’s debts.

Following the reasoning of Iroko TV founder, Jason Njoku, a reasonable sum of all that money belongs to ordinary Nigerian customers who keep their savings in those banks. No panic was triggered by the news of the various amounts owed to the banks by Etisalat, and it is good that the company remains active and not bankrupt.

But going forward, are there any dangers for keeping our monies in the banks with such businesses ever likely to recur in the future?

Bank officers are not immune to the pressure of the possible failure of companies who borrow from them, as the unfortunate suicide incidents of some staff would show. They would deal with such “big companies” whom they believe have a wide reach and some international credibility, even if such companies ride on business models that are not very profitable in a hyper-competitive market like the communications industry.

It is telling that, together with the NCC, the CBN has been involved in the transition of Etisalat to 9Mobile, throwing more light on the financially-sensitive nature of this particular transition. The company’s financial projects could now attract some extra scrutiny from regulators beyond the communications industry.

9Mobile will still borrow from banks, inevitable, but the presence of the CBN does give a sense of security that the banks will be moderated in how much they can offer to the company. That would be a relief to ordinary depositors, and one might hope something like this applies to all other companies in the communications sector as well as in other sectors.

Nobody deserves to have any extra trouble thinking about the safety of the little savings they manage to keep in bank accounts. Otherwise, Jason’s suggestion about keeping savings under one’s bed would become necessary.

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