FG’s single account deadline: N2.6trn govt deposits in 20,000 bank accounts to be closed this week

As the Federal Government moves to enforce Treasury Single Account (TSA) this week, there are indications that over 20,000 different bank accounts run by federal ministries and 600 government federal agencies would be clamped.

Sunday Vanguard learnt 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 per cent of banking industry’s N13 trillion total deposits are public sector funds.

But a top executive of one of the affected banks said, at the weekend, 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.

He pointed out that 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 per cent of total money market liquidity.

However, he noted that the policy is presently predominantly Federal Government account as most states are not eager to toe that line, thereby giving some of the banks a breathing space.

Source: Vangaurd