TSA: MDAs to close 20,000 bank accounts this week

Barring any last minute change, which the presidency has already put down, federal ministries, departments and agencies would close their bank account in commercial banks across the country, which have been estimated to be about 20, 000.
This is in obedience to the Federal Government’s moves to enforce the Treasury Single Account (TSA) directive.
Central Bank of Nigeria’s (CBN) in its second quarter 2015 report, estimated that the agencies had about N1.24 trillion in about 20, 000 accounts with different commercial banks. The report 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.

Read also: Heads to roll as Buhari issues deadline for TSA

He said that public sector deposits in banks should be more than double what was reported then by the CBN.
Banks are jittery, that if government decides to implement the policy strictly, there will be serious liquidity crisis in the top six banks as the public sector deposits control about 70 per cent of total money market liquidity.
There is however breathing space for the banks as the directive is basically on Federal Government account as most states are not eager to toe that line.

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