CBN begs banks on behalf of state govts

In from Ali Smart …
For states government still struggling to pay salary arrears owed workers in their various states, the Central Bank of Nigeria (CBN) has mandated the Deposit Money Banks (DMBs) to help the affected states to clear the backlog.
A statement from the CBN Wednesday said it granted the approval following the request by Deposit Money Banks (DMBs) “to provide financial accommodation to State Governments to enable them pay the backlog of salaries of their workers.”
The conditions for accessing the loan facility from respective banks the CBN said “include resolutions of the State Executive Council authorizing the borrowing and State House of Assembly consenting to the loan package, as well as issuance of Irrevocable Standing Payment Order (ISPO) to ensure timely repayment.
Ripples gathered that the apex bank issued the Irrevocable Standing Payment Order (ISPO), because”it is clear that the facility is not free the states’ financial exposures to the banks becomes first line charges that will be deducted from their monthly allocation from the federation account as a result of the ISPO.”
Out of the 27 states involved, funds have been disbursed to two states namely Zamfara and Kwara States that met the requirements as agreed with their respective banks.

Read also: CBN says energy firms owe banks N3.7trn

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