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.