One of the indicators of the activities in the economy from banking relationship perspective is the level of transactions in the accounts of bank customers. Reducing transactions will readily refer to less economic activities while increasing transactions will refer to more activities in the economy.
Banking transactions takes place in the Current Accounts of bank customers while Saving and Term Deposit accounts warehouses investments or investible funds.
Details of the Deposit Breakdown in the Selected Banking Data Q1 2019 Reports recently released by the National Bureau of statistics (NBS), revealed that Time and Savings Deposit balances are rising while Demand Deposit balances are reducing.
Funds in Demand Deposit accounts in all financial institution in Nigeria reduced by N286 billion in Q1 2019 while the funds in Time and Saving Deposit accounts increased by N552 billion. Indicating that bank customers are leaving more funds in Time and Saving accounts and less in Demand Deposit accounts.
The banking sector deposit figures released by the NBS also revealed that bank customers are increasing showing their preference for bank interest rather than engage in productive activities because of the many difficulties bedevilling the business climate in Nigeria.
The difficulties of Utilities and Infrastructure that has remained indefinable and has kept Nigeria as a consuming rather than producing nation must be tackled. Otherwise funds will continue to be kept idle in banks by bank customers to the detriment of production activities. The attendant employment and economic rejuvenation potentials will also remain elusive.
The CBN with its many intervention programs have demonstrated its commitment to resolving many of the economic issues the country has. The kind of commitment yet to be seen of the Deposit Money Banks especially towards bank customers.
The CBN recent announcement of its resolve to limit Deposit Money Bank access to Money Market activities may be the necessary action to make Banks perform its traditional role of financial intermediary in the economy.
Because, truly no business (Banks Inclusive) will be presented with a choice between risk-free investments like Treasury Bills and the busy and risky option of lending to customers in an uncertain economy and choose the later unless it is cajoled to do so.