TSA: CBN fines First Bank, UBA N4.8bn

The Central Bank of Nigeria, over the weekend, made good its threat to sanction commercial banks that failed to comply with the directive for a Treasury Single Account, as it sanctioned First Bank of Nigeria Limited (FirstBank) and United Bank for Africa (UBA) Plc to the tune of N4.819 billion.

A circular from the CBN showed that a penalty of N1,877,409,905.12 was imposed on FirstBank while UBA was fined N2,942,189,651.45 for failure to comply with the policy of the Federal Government.

According to an industry source, FirstBank was alleged to have concealed N37,548,198,102.41 belonging to the Nigerian National Petroleum Corporation’s (NNPC) without remitting it to the TSA as directed while

UBA allegedly concealed N58,843,793,029.05 of NNPC funds.

The source, told THISDAY that the penalty was the equivalent of five per cent of the funds they failed to remit respectively.

“The accounts of both banks with the CBN have been debited for the unremitted amounts and the penalties,” the source said.

The source further said that officials of the CBN at the last Bankers’ Committee meeting held in Lagos, emphasized the need to comply with the directive, adding that it had it on good authority that some banks were colluding with some ministries, departments and agencies (MDAs) to conceal their funds.

According to the report, the chief executives of the banks said that they had a directive from the Accountant-General of the Federation to a Director in the CBN exempting some MDAs from transferring their funds to the TSA.

“But the CBN rejected the claim, informing them that the letter was written to a Director with the CBN and not the governor of the CBN and that the governor had not received a counter-directive from the presidency on the transfers. After the clarification, they all promised to remit any outstanding amounts with them.

“However, a week after the meeting, CBN discovered that some banks had still not complied and proceeded to call all tier 1 banks reminding them that they must do so, otherwise they would be sanctioned.

“They responded again stating that the Office of the Accountant General had again sent them a schedule asking them to disclose how much of the funds belonging to MDAs had been transferred and how much was still with the banks,” the source explained.
Read also: TSA: CBN gets N2tn from banks

Speaking further, the source said the CBN Director, Banking Supervision, Mrs. Tokunbo Martins, wrote to the banks asking that they furnish it with information on any unremitted funds, after which it was established that FirstBank and UBA had failed to remit N58.8 billion and N37.5 billion respectively, leading to the imposition of the penalty of N4.819 billion on both banks, adding that the two banks were simply recalcitrant in complying with the directive.

Commenting on the development, executive of FirstBank said what happened was “miscommunication”, explaining that when the confusion arose from the circular from the Accountant-General, CBN had itself directed that NNPC’s funds should be retained with the banks for 18 days, pending the resolution of the matter.

“The 18 days only expired last week, so we do not see how we failed to comply with the directive or attempted to conceal the funds. This is most unfortunate and occurred due to miscommunication from the Accountant-General and the regulator,” he said.

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