Banks ‘Explain’ Why They Did Not Remit TSA Funds
The CBN on Tuesday announced that it had suspended 9 Commercial Banks from accessing the foreign exchange window because they had not remitted funds from the Treasury Single Accounts (TSA) held on behalf of MDA’s to the CBN.
According the reports, the banks have failed to remit $2.1 billion, being the government’s share of dividends from the NLNG, to the coffers of the CBN.
The CBN did not disclose how long the suspension would last but reports suggests that additional fines and penalties could be meted out.
Some bankers have however responded in an attempt to explain what had happened to TSA funds in their custody. Here are some of their responses as culled from Reuters;
“This is really a function of the dire macroeconomic situation and illiquidity in the FX markets rather than willful non-compliance by banks,” said Diran Olojo, a spokesman for FCMB, one of the banks.
An explanation suggesting that banks may have held on to the TSA funds due to tightening liquidity within the financial system. With liquidity tight, banks now have enough cash to meet obligations of their depositors.
“We could not trade today…..The suspension is meant to pass on the pressure to banks to make payments (but) this is foreign currency and we have to source the dollars.”
Some of the affected banks are said to be selling assets to generate enough cash to refund the CBN.
Some unconfirmed sources also explain that some of the cash that was withheld belonged to agencies of Government who may have financial obligations to some of the banks.
The Central Bank has been under pressure to make sure the flexible exchange rate market works as planned as well as ensure that foreign investors are confident enough to return to Nigeria. Some of these actions could be perceived as a sign of desperation from the apex bank.