E.R.R

E.R.R

Thursday, September 17, 2015

TSA: Banks move N2tr to CBN

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TSA: Banks move N2tr to CBN
• CBN Governor Godwin Emefiele
Deposit Money Banks (DMBs) have so far moved an estimated N2 trillion, out of the N3.5 trillion public sector funds in their vaults to the Central Bank of Nigeria (CBN), it was learnt yesterday.This is in line with the Treasury Single Account (TSA) policy of the Federal Government, which is meant to improve transparency and accountability in the management of revenue.A major money market operator said there had been no report of violations from the banks, except for some Ministries, Departments and Agencies (MDAs),  where some are yet to comply with the TSA deadline which ended on Tuesday.Managing Director, Meristem Securities Limited, Sulaiman Adedokun, said some of the banks which did not have the needed liquidity to move the funds immediately had to sell-off their liquid instruments like Treasury Bills and Federal Government  bonds to get the needed cash in the transaction.He said the CBN is working out measures to cushion the negative impact the movement of the funds will have on banks’ balance sheets and amount of cash available for lending. This, he said, is based on the regulator’s new policy promoting growth and development of the economy.Ministries, Department and Agencies (MDAs) of the Federal Government that failed to meet Tuesday’s deadline to migrate to the Treasury Single Account (TSAs) will be sanctioned, the office of the Accountant General of the Federation (AGF), said yesterday.A statement signed by Mrs Kene Offie said “almost all MDAs, especially the revenue yielding ones have all complied with the Presidential directive to transit to the Treasury Single Account (TSA). Sanctions will be meted to any erring MDA.”The AGF office did not identify those MDAs that were yet to make the transition but not less than 90 per cent, about 700 MDAs had migrated.The statement said AGF Alhaji Ahmed Idris commended all MDA that so far complied.He affirmed that “the Treasury Single Account has come to stay, the compliance is an indication that Nigeria is at the threshold of a new era of transparent and accountable management of Public finances.”The Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim said that the full implementation of the TSA was a signal that the era of arm-chair banking in Nigeria was over, adding that the TSA policy had presented banks with an opportunity to diversify their sources of deposit mobilisation. Alhaji Ibrahim emphasised that the implementation of the policy should not be strange to the banks, because, according to him, they (the banks) had been warned about three years ago to take steps that would make them not to over rely on government deposits.On the rumour of mass retrenchment in the banking system due to the TSA policy, the NDIC boss said the rumour was unfounded. He emphasised that organisational renewal was a continuous exercise whereby banks not only rationalise their branches and entire operations to enhance efficiency but also undertake recruitment to renew their human capital.The Federal Government ordered all MDAs to start paying into a TSA for all government revenues, incomes and other receipts. According to the directive, the measure is specifically to promote transparency and facilitate compliance with sections 80 and 162 of the 1999 Constitution.Nigeria’s interbank money market was halted for a second day yesterday after the CBN told commercial lenders to provide cash backing for foreign exchange purchases at its proposed intervention on Friday.Trading on the interbank market was first halted on Tuesday as banks complied with a directive to transfer government revenues into the TSA.“The market is not trading yet,” one dealer said. “What we have is an indicative rate from some banks because of the instruction from the central bank to provide funding for forex intervention.”“We only have people quoting about 50 percent as indicative rate for overnight placement,” another dealer told

Reuters.

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