In line with its threat to
sanction commercial banks that failed to comply with the federal government’s
directive on the remittance of government revenue to the treasury single
account (TSA), the Central Bank of Nigeria (CBN) last Friday fined First Bank of
Nigeria Limited (FirstBank) and United Bank for Africa (UBA) Plc the sum of
N4.819 billion.
According to a circular
obtained from banking industry sources, while the CBN imposed a penalty of
N1,877,409,905.12 on FirstBank, UBA was fined N2,942,189,651.45 for its failure
to comply with the federal government’s policy.
An industry source explained
that FirstBank concealed N37,548,198,102.41 belonging to the Nigerian National
Petroleum Corporation’s (NNPC) instead of remitting it to the TSA as directed.
On the other hand, UBA
concealed N58,843,793,029.05 of NNPC funds, which attracted the penalty.
The source explained 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,”
she added.
Providing further insight, the
source said at the last Bankers’ Committee held in Lagos early this month, the
central bank officials had impressed on the banks the need to comply with the
directive, saying that it had it on good authority that some banks were
colluding with some ministries, departments and agencies (MDAs) to conceal
their funds.
In response, the bank chief
executives 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.
The chief executives of both
banks were said to have been present at the meeting held at the central bank’s
Lagos office on October 2.
“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,” she explained.
Thereafter, the source said
the CBN Director, Banking Supervision, Mrs. Tokunbo Martins, then 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.
The source explained that
FirstBank and UBA were being recalcitrant by refusing to comply with the
directive despite repeated efforts by the CBN to get them to transfer the
concealed funds.
She however clarified that the
concealment was not a reflection on their liquidity, as both banks are very
liquid.
“The system is awash with
liquidity and this has been reflected in the NIBOR and deposit rates which have
crashed. FirstBank and UBA as Tier 1 banks are both very liquid, so their
decision to conceal the funds had more to do with their collusion with the
chief executives of the MDAs than any confusing directive from the Accountant
General,” she explained.
However, an executive of
FirstBank informed THISDAY last week that there must have been some kind of
“miscommunication” that led to the non-transfer of the NNPC funds.
He explained 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.
The FirstBank executive
further assured THISDAY that his bank does not have a liquidity crisis, adding
that FirstBank has a liquidity ratio of 50 per cent, 20 per cent above the CBN
threshold of 30 per cent for commercial banks in the country.
“Trust me, we are very liquid.
We have a liquidity ratio of 50 per cent, which is 20 per cent above the rate
permitted by the CBN for banks.
“We have even informed our
depositors that we are crashing deposit rates to between 3 and 4 per cent
because we have excess liquidity, so we do not have a liquidity crisis in any
shape or form,” he stated.
Source: This Day
Source: This Day
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