CBN EXPECTS 100% COMPLIANCE ON TSA AS DEADLINE ENDS TODAY

The Central Bank of Nigeria said on Monday it expects that all federal Ministries Departments and Agencies (MDAs) would have complied with the Treasury Single Account Policy of government at the expiration deadline ends today.

The CBN is also insisting that it would severely sanction banks which fail to move all government monies in their vaults to its custody in line with the Treasury Single Account (TSA) before the end of today.

This is observed as Deposit Money Bank commence massive downsizing of staff
in what is seen as a quick adjustment to the obvious liquidity strain as a result of the TSA policy which analysts has already led to a further sterilisation of N500 billion banking sector float at the CBN.

Desperate to keep afloat, most of the banks, especially those of them which so much depended on public sector deposits for business are already cash-strapped and as a way of cutting cost have started cutting down their staff.

BusinessDay reliably gathered that a notable tier-one bank just last week sacked 300 of its staff and about 40 Assistant General Managers. The bank, it was learnt had slashed staff salaries before the sack.

Another bank, in a tier 11 class, sacked about 250 staff last month, it was also learnt.

A top CBN official told BusinessDay that as at yesterday, majority of the MDAs have already moved their accounts from the Deposit Money Banks to the Single pool at the apex bank while the remaining few are making last minute effort to comply before the end of today.

TSA, which commenced a few years ago but now enforced by President Buhari is a unified structure of government bank accounts that gives a consolidated view of government cash is expected to bring about transparency, efficiently and accountability.

It is expected to encompass all receipts and payments of the government handled by MDAs, partially funded by the Federal Government and all government controlled Trust Funds and Social Security Funds.

Prior to TSA, Nigeria had fragmented banking arrangements for revenue and payment transactions. Over10, 000 bank accounts were held in multiple banks, which made it impossible to establish government consolidated cash position at any point in time.

This led to pockets of idle cash balances held in MDAs’ accounts while government was out there borrowing money to run the economy.

The fragmented banking also affected the government’s ability to undertake efficient cash planning and management as required by the Fiscal Responsibility Act.

But analysts fear that the policy could further constrain banks’ earnings as a slew of regulatory actions as well as global headwinds have already hit their bottom lines.

“It is quite tight for all banks right now. There is no money and most banks are sacking,” a close bank staff confided in anonymity.
“The thing now is that we are on our toes, because once you commit one offense, you are gone,” she lamented.