Special Report

BULLETS, BLOOD AND LOADS OF CASH (III): Financial and economic woes left behind in commercial bank robberies

Investigative journalist Ridwan Yusuf spent 18 days sussing out the consequences of incessant bank robberies in Nigeria’s southwest region. In the last of this three-part series, he tells how commercial banks in that axis lost millions of Naira to armed robberies in 2021.

This is the third of a three-part series. You may read Part I here and Part II here.

Whilst considerable human toll is perhaps the most worrisome impact from bank robberies, direct economic loss is also a pathetic aftereffect.

In 2021, the precise amount of money stolen during bank robberies in Nigeria’s southwest region is unknown. Simple reason being that many of the cases are recorded as “an undisclosed sum of money carted away”. When the internal control officials of the banks visit the affected branch and establish the stolen figure, they don’t come back to tell the public how much was looted. On top of that, the Central Bank of Nigeria (CBN) bi-annual economic report is usually generalised. The nature of the crimes of fraud and forgery (perpetrated by both employees of banks and other criminals) are specified as armed robbery attacks, fraudulent Automated Teller Machine (ATM) withdrawals, illegal transfer of funds, cash pilfering, defalcation, suppression and conversion of customers’ deposits, etc. What is certain, however, is that a huge sum of money is lost in a successful robbery operation — and of course, the cash is practically irredeemable: lots of money always thieved.

To give an instance, during the botched robbery attack on a First Bank branch at Okeho town, Kajola Local Government Area of Oyo State in July 2020, roughly N60 million (about 145,998 US Dollars on December 24, 2021 using mid-market rates) was stolen. That’s the exact amount a state government, Yobe, expended on disaster victims and vulnerable people from 2020 to 2021.

Hence, how can these gun-toting lawbreakers be forestalled from carting off money they did not deposit?

Money storage devices are becoming increasingly safer with mechanisms for hindering robberies. On the other hand, electronic payment systems, e-banking services, and Automated Teller Machines (ATMs) have become more commonplace.

Consequently, bank offices do not need to have large amounts of cash.

To discourage the use of cash and reduce its volume in circulation, in 2012, the CBN released a cashless policy document that placed charges on cash deposits and withdrawals in excess of a certain threshold.

The policy’s implementation was suspended shortly after a pilot test in Lagos State, with concerns about its nationwide workability.

After a few delays, in 2019, the CBN announced that the policy would be kickstarted in six states before a nationwide implementation in April 2020.

Feyi Fawehinmi

According to Feyi Fawehinmi, a Finance expert, electronic cash and payments should be encouraged. “The push to electronic money from a few years ago seems to have lost momentum, so maybe there is the need for policymakers to launch another drive that makes it easier to do electronic payments in more parts of the country.”

For another finance expert, Michael Olafusi, the traditional banks should work colossally with agency banks. With this, bank robbers will be discouraged.

“I believe one of the best ways to reduce attractiveness to robbers is when they (the commercial banks) pass on many of the cash deposit and withdrawal activities to agency banks,” Olafusi says. “By agency banks, I mean those retail outlets and Point of Sale (POS) spots where you can do your financial transactions without stepping into the traditional banks. Once people no longer see banks as a place where people queue to deposit and withdraw money, the criminals who rob banks will find it less attractive, thus erasing the lure to rob them.”

Africa’s first e-currency, e-naira, launched in October 2021, is also seen as a boost to the government’s plan of reducing the amount of cash transactions in the system. Time will tell whether like the cashless policy, this new initiative will be stalled.

Financial inclusion in danger

The persistent and unabated rate of deadly armed robbery attacks targeted at financial institutions in the Southwest has not only impacted negatively on that region’s economic growth and grassroots development, it has put the whole financial inclusion idea in serious jeopardy.

CBN Governor, Godwin Emefiele’s target of having 95 percent of Nigerians financially included by 2024 now seems far-fetched. While that aspiration can be achieved substantially in major cities, the rural areas remain the issue. The challenge is that as armed robbers target banks domiciled in the rural communities, people will be further excluded from financial services. Financial inclusivity will not happen if gunmen believe they can continue to invade communities, kill policemen and walk into the bank vaults to cart away money that is not theirs.

“Maybe we now need the authorities to step in with more incentives for rolling out things like payment points and POS,” Fawehinmi says of the possible remedy.

With the increasing rate of violent armed robberies that claim lives, including of their staff, it is understandable that many of the banks are not keen to expand their branches to rural communities. The implication of this, Olafusi explained, would adversely affect residents of these rural communities, taking their level of digital literacy into consideration.

“Unfortunately, it negatively impacts the people in the community as they are less digital technology savvy to completely migrate to digital banking and not need a physical bank. I think agency banking will help a lot in those communities,” he said.

Michael Olafusi

While banking historically has involved a human element for many customers — including forming relationships with their regular banking tellers and managers — the digital space is inevitable, according to Olafusi. With the menace of bank robberies in Southwest Nigeria, discontinuation of the establishment of physical banks in the undeveloped areas would only be faster, Olafusi, also a Business Analyst, said.

“I believe banks are just generally not opening new branches anymore and actively working on reducing their physical branches in favour of digital banking and cost optimization. The branch closing might be swifter in these robbery prone communities, but they were going to eventually happen,” he said.

“From my speaking to bank managers in such communities, they mentioned that the robberies were mostly aided by some security outfits, and the community leaders worked arduously to forestall subsequent robberies. Most were successful in stopping this trend in some communities, as they saw the negative impact it was having on their business and also family members who worked in those banks.”

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