Two Prominent Banks To Face Severe Sanctions Over Failure To Comply With TSA Directive



Reports suggest that a rare joint action by the Presidency and the Central Bank of Nigeria (CBN), two prominent banks will face sanctions this week for circumventing the Presidential directive on the Treasury Single Account (TSA).

THISDAY gathered on Saturday that the CBN was considering either a hefty financial sanction, suspension or removal of the CEOs, and the dissolution of the board of directors for the banks.

One of the banks is being sanctioned for the concealment of over N37 billion from the account of the Nigerian National Petroleum Corporation (NNPC) while the second bank is yet to return over N100 billion belonging to NNPC despite warnings by CBN Director of Banking Supervision, Mrs. Tokunbo Martins,  in several letters to the banks and admonition by the Central Bank Governor, Mr. Godwin Emefiele, through the Bankers’ Committee that banks that are still holding Federal Government’s funds will face severe sanctions.


As at last weekend, about N1.2trillion had been returned by banks to the CBN instead of the expected N1.5 trillion within the banking system. Drastic measures are however being taken to recover the outstanding funds.

Many banks are thought to be hiding under an authorisation letter from the Accountant General of the Federation, Alhaji Ahmed Idris, who tried to exempt certain agencies. But that was strongly overruled by the Presidency and the CBN.

President Muhammadu Buhari is determined that all MDAs and ministries must comply with the directive on TSA as part of his move against corruption and to block leakages in the system.

The move to clamp down on the two banks that did not comply with the Presidential directive that balances/receipts due to the government or its agencies be paid into the TSA domiciled in the CBN, is coming a month after the expiration of the TSA deadline.

Sequel to the president’s directive, the CBN had warned that commercial banks that failed to comply with the September 15 deadline for compliance with remittance of federal government revenue to the TSA would face severe sanctions.

The directive had sent shock waves around the financial sector due to the huge government deposits in commercial banks that would be affected by the policy. Financial analysts and bankers had argued that because of the huge funds involved, it would further tighten liquidity.

CBN however moved to ease liquidity in the banking system, in response to a severe liquidity squeeze in the interbank market at the last meeting of the Monetary Policy Committee by ensuring that the Monetary Policy Rate (MPR) remained unchanged at 13 per cent+/- 200 basis points around the symmetric corridor  and reduced Cash Reserve Requirement (CRR) from 31 per cent to 25 per cent to reflate banking sector liquidity.

SEE ALSO: 300 MDAs Fail To Comply With Buhari’s TSA Directive

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