Beware the power of social media

The collapse of Chase Bank last month refreshed my memories of stories I heard during my childhood regarding the safety of customers’ deposits in a commercial bank.

In the 1970s while growing up in Garba Tula, a small dusty town in what was then Isiolo District, we heard stories about a local wealthy man who deposited his money with a multi-national bank.

Wealth, of course, in our context meant someone who had countless livestock.

The Isiolo branch of the bank was then the only bank serving the entire Northern Frontier District (NFD), which is half of Kenya’s land mass.

That meant something.

Our wealthy pastoralist was initially not convinced to trust his money with people he never knew.

It was only when a teller (a native of the area) at the branch assured him of the safety of his money did the elderly man agree to bank some of his hard-earned money.

The condition was that only he and no one else in the bank would touch his money. (Forget that the money would be mixed with others banked through other tellers).

And that could explain the ceremony that followed.

Each banking day after early morning prayers at the local mosque, the old man beat the path to the bank with his dogs “to confirm if the bank was still there and whether his money was safe.

To do this, he formed a habit.

He first greeted the security guards to get any indication of whether everything was okay.(And you think these frontline employees don’t mean much?)

Fortunately or unfortunately, ATMs never existed then; otherwise it would have caused him great anxiety.

Fast forward, today many customers are behaving the same way the old man did 30 or 40 years ago.

Like him, they have developed cold feet in the wake of the collapse of Chase Bank.

With it, close to Sh9 billion in customer deposits went up in smoke and unless something gives way, it will be hard to recover that colossal sum from the meagre investment the funds were allegedly sunk in.

We are concerned about our deposits.

Just like our old man above, I too, am jittery whether to leave my money in a bank or take it out and put it somewhere else.

At times, I am tempted to call my banker just to know if my money is still there.

The truth is, money just doesn’t disappear from banks.

The question to ask is whether bankers craft ways to enrich themselves and their friends with depositors’ money with the full knowledge that they will never be caught?

And even if they are, that nothing will ever happen to them.

They might have to fight a few court cases for years, and perhaps pay up a small portion of what they stole, but that’s that.

The penalties for abuse are mere discomfort.

But is the banking industry in crisis? Not so, says Central Bank of Kenya Governor Patrick Njoroge.

I agree with him.

Banks are risk averse and the risk of a contagion in a region like ours where only hardnosed businesses survive, will take more than understated insider loans.

The comfort is that the case of Imperial or Chase banks’ collapse is not symptomatic of a systemic rot.

Two apples were found rotten and taken out of the bag.

And as from other tragedies of our time, trust Kenyans to infuse humour into things. I must admit that I learnt something as well.

I chuckled when I heard Dr Njoroge, a man I hold in very high esteem, blame social media for Chase’s sad end.

I have written here before about the phenomenon of social media. That it is time for the Facebook generation; the band of youthful fellows who take no prisoners.

They have constantly been lampooned as lacking the stamina to get things done. Some even fail simple spelling tests. Not with Chase Bank it seems.

I tell you what; it has frequently fallen on the youth to stir up things, topple regimes and liberate societies.

They toppled a bank; we should be wary what next they can do.

They could come after us, politicians next. This determined youth, who is inspired by peer persuasion, will go against the grain and change the course of things.

Like it or not. To them, this equals to a pilgrimage of sorts. Think about this: the 1989 uprising in Poland that triggered the end of Communism in Europe was predominantly driven by the youth; the Tank Man of Tiananmen Square brandishing a handful of paper bags, blocked a column of tanks that was rolling through Beijing in 1989.

Wang Weiling, then 19, stood up to the tanks and though no trace of him was ever found, his defiance became the symbol of the protests by students and the Chinese demanding greater freedoms and more accountability from their government and leaders. That says a lot.

They came for Chase Bank, who is next?