TSA: CBN Governor, Bank CEOs at war

By DICKSON OMONODE

THE controversy trailing the compliance to the recent directive by President Muhammadu Buhari to Federal Government Ministries, Departments and Agencies (MDAs) to collapse all bank accounts in Deposit Money Banks (DMBs) into a Treasury Single Account (TSA) has pitched the Governor Central bank of Nigeria (CBN) Mr. Godwin Emefiele against Chief Executives of Nigerian Banks.
National Daily sources close to CBN disclosed that the outcome of last Friday’s Bankers’ Committee Meeting which held in Lagos did not meet the expectations of the leadership of the apex bank over the level of compliance by the banks to the directive of Mr. President.
According to our sources, the CBN governor had began the discussion on this item on the agenda with sterness while threatening to sanction banks who were still housing funds for any Federal Government MDAs, stating that the development was becoming embarrassing to the apex bank which expected that the compliance level should have been absolute with approved few exceptions.
The bank CEOs responded by pointing out that it will amount to an unfair treatment should the CBN go ahead with the planned sanctions. Accordingly, the bank chiefs argued that the issue was more of a challenge of bank/customer relationship. They stated that no bank could on its own legally effect the transfer of a customer’s fund to another account without the written instruction of the customer or at least an order of the court.
It was further disclosed that a bank narrated its ordeal with a security agency it transfered funds in the account of the security agency in the bank to the CBN, in an attempt to comply with the directive on its own. When the security agency wanted to access the funds and were told that the funds had been moved to the CBN, they reportedly stormed the branch of the bank where the account was domiciled, shut down operations and almost abducted the manager in charge.
The incident was immediately reported to the CBN governor who made contact with the service chief of the security agency to call his officers and men to order, while an arrangement was made by the apex bank for funds to be made available to the agency.
The bank chiefs then informed that in the light of the reported incident which was corroborated by Mr. Emefiele, it may cause more frictions between them and their customers should the banks go ahead to effect compliance without the written permission of the affected agencies of government.
Consequently, the senior bankers were unequivocal in pointing out to the CBN helmsman that the apex bank which knew how much each government agency still had in the DMBs can as a matter of fact use its powers as the regulator and debit the banks with the respective amounts.
By this action, the CBN would have taken responsibility and all the DMBs would do when the agencies come to them is to let the government agencies know that the CBN moved the funds out of their accounts.
At this point, the CBN governor who was visibly uncomfortable with the direction the discussion was moving informed the committee that he would have to go make further consultations.
President Buhari had on August 9 ordered each and every Federal Government Ministry, Department or Agency to start paying into a Treasury Single Account (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.
Consequently, the president set a deadline of Tuesday, September 15 for full compliance with his directive that all revenue due to the Federal Government or any of its agencies must be paid into the TSA or designated accounts maintained and operated in the CBN, except otherwise expressly approved.
A corresponding circular issued to all Ministries, Departments and Agencies of the Federal Government by the Head of the Civil Service of the Federation, Mr. Danladi Kifasi, urged the MDAs to ensure strict compliance with the deadline to avoid sanctions.
A TSA is a unified structure of bank accounts enabling consolidation and optimal utilization of government’s cash resources. It is a bank account or a set of linked bank accounts through which government transacts all its receipts and payments and gets consolidated view of its cash position at any given time.
How the CBN intends to ensure full compliance in the light of some operational challenges among others already hampering the process remains to be seen.