eNaira may threaten banks’ source of income



As Nigerians await the launch of Central Bank Nigeria’s digital currency, eNaira, some financial experts have argued that while the introduction may deepen the financial inclusion drive in the country, it may also erode the profitability of some banks in Nigeria.

The eNaira which will be an electronic version of the local paper naira currency, equal in value and issued by the CBN, was earlier scheduled to take off by October 1st, and later postponed by the CBN.

Analysts believe that the much-anticipated unveiling of digital currency by the CBN is a major step in digital banking that would be beneficial to consumers because users might choose to hold money in their eNaira wallets instead of leaving it in deposits with their banks.

A banker who craved anonymity revealed that banks are afraid that the eNaira will erode their profitability, especially in the area of commissions and charges.

Similarly, Cyril Ampka, an Abuja-based economic analyst, said, “With eNaira, there is no hiding place for banks and their hidden charges as everything about the CBC is transparent and open.

“I expect banks to start thinking of how to onboard the eNaira feature on their e-channels because the majority of Nigerians have experienced deduction of unbelievable charges.”

Another economic analyst, Mr. Tochukwu Egesi, noted that although financial institutions will be able to develop their own eNaira wallets, the initial roll-out will use the CBN’s Speed Wallet.