BANKS DEMARKET EACH OTHER

Last week the banking industry witnessed fresh round of de-marketing when some operators began to originate and sponsor telephone SMS to discredit the competitors.

Some of the text messages were alleging that some of the targeted banks were distressed or having liquidity problems. They also urged depositors to run from those targeted banks listed. About 13 banks were listed in four different text messages.

Industry sources are of the opinion that the originators of the SMS were merely trying to undermine the targeted bank’s hold on some particular customers with a view to snatching the customers.

They also disclosed that because some banks’ financial year is ending around this period they were desperate to rake in as much deposit as possible by all means to reach pre-determined financial results.

This de-marketing phenomenon appeared to have been intensified following the Central Bank of Nigeria’s (CBN) decision to enforce uniform year end for all banks this year, a situation which has restricted inter-bank borrowing.
It would be recalled that CBN came down hard on some operators in the industry who are fond of blackmailing their colleagues through unethical marketing strategies.
According the Central Bank of Nigeria (CBN) the responsibility for ensuring the safety and soundness of the banking system is a collective one for all stakeholders in the banking industry.
To check the trend, the CBN had issued a circular in 2006, against the spreading of false rumours among the operators. According to the circular reference BSD/08/2006, the CBN warned against what it called, “the unethical and unprofessional practice of de-marketing colleagues/other banks in the industry by spreading rumours.”
In its latest circular, the apex bank noted with concern the recent practice whereby, some officers of deposit money banks engaged in the de-marketing of other banks through disparaging comments and the use of negative text messages.
It said, “Banks are advised to caution their staff on this practice as henceforth, any staff of a bank found to be involved in such an act will be summarily dismissed and blacklisted.”
The bank also warned that if another staff of the same bank was involved in such a practice, the institution would face severe sanctions, including but not limited to a monetary fine of N10m, adding that appropriate channel would be opened by the CBN for the report of such unwholesome practice by banks’ customers and the general public.
The statement added that in the overall interest of the banking system, all banks were advised to enthrone an appropriate corporate culture that would guide against such practices in the future.
However, CBN insists that no bank is having problems in the country adding that it is ever-ready to ensure that no bank in Nigeria fails.

But many observers believe that the apex bank needs to do more to rid the banking industry of such irresponsible acts and individuals.

These banks are fooling themselves out, the only true way out for them is merging.

Definitely there wil be another round of consolidation the banks can't escape this:

The competition is getting stiffer and that would mean one thing either survive or die