Nigerian banks will lose 20,000 huge accounts this week. No thanks to President Muhammadu Buhari who has directed a Treasury Single Account (TSA) be enforced this week. The bank accounts are those run by federal ministries and 600 government federal agencies.
According to findings by the Sunday Vanguard, the agencies’ accounts are holding about N2.6 trillion in 20 banks contrary to the initial estimate of about N1.24 trillion reported in Central Bank of Nigeria’s (CBN) second quarter 2015 report. The report had indicated that less than 10 percent of banking industry’s N13 trillion total deposits are public sector funds.
The newspaper quoted a top executive of one of the affected banks to have said that the CBN report was based on the returns’ renditions by banks which had substantially under-reported public sector proportion of their deposits in order to head-off the impact of the apex bank’s dual Cash Reserve Requirement (CRR) policy which was then heavily skewed against public sector deposits. He said that public sector deposits in banks should be more than double what was reported then.
According to him, if government decides to implement the policy strictly, there will be serious liquidity crisis as the top six banks in the public sector deposits control about 70 percent of total money market liquidity.
A treasury single account (TSA) is an essential tool for consolidating and managing governments’ cash resources, thus minimizing borrowing costs.
The Nigerian Government on Friday said there was no going back on the September 15, 2015 deadline for all Ministries, Departments and Agencies as well as the general public to comply with the directive on the Treasury Single Account, TSA policy.
“The September 15, 2015 deadline for the closure of all accounts of Federal Government MDAs with the commercials banks is realistic, achievable and will not be shifted forward,” Accountant General of the Federation, Ahmed Idris, said.