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Published On: Tue, Jul 19th, 2016

GTB, Stanbic IBTC, Keystone Bank in Trouble for Violating TSA Guidelines

CBN
LAGOS JULY 19TH (URHOBOTODAY)-Guaranty Trust Bank, Stanbic IBTC and Keystone Bank are in trouble for violating the guidelines of Treasury Single Accounts as laid down by the Central Bank of Nigeria (CBN).
The Central Bank of Nigeria queried the aforementioned banks for allegedly concealing funds belonging to Ministries, Departments and Agencies of the federal government.
But bankers say that the office of the Accountant General of the federation has no power to query banks on TSA that it should rather query the MDAs.

Stanbic IBTC has however denied the accusation saying it has been complying with the TSA directive, while GTBank explained why it has allowed some MDAs to continue to operate their accounts contrary to the TSA directive
Vanguard had exclusively reported last month that some MDAs are circumventing the TSA guidelines by operating accounts with banks. Vanguard also reported that the violations were abetted by banks who agree to use pseudo names to open accounts for the MDAs.
Vanguard investigations reveal that prior to the report; the AGF had queried GTBank, Stanbic IBTC, Keystone bank and some other banks over the violation. Speaking under condition of strict anonymity, a banking source said, “It is a serious issue to the extent that the Office of the AGF recently queried some banks over it.”
It was gathered that the query was contained in a letter titled: “Non-Compliance with the Treasury Single Account (TSA) Directive”. Addressed to the Managing Director/Chief Executive of each banks, the letter was signed by the AGF, Mr. Ahmed Idris while the Governor, Central Bank of Nigeria was copied.
A copy of the letter made available to Vanguard on condition of anonymity stated: “We have observed with dismay that Deposit Money Banks are concealing funds belonging to the federal government ministries, departments and agencies in their various banks. This is in violation of the Presidential Directive on the TSA policy that all funds belonging to the federal government MDAs including foreign currency denominated funds be transferred to the TSA
“Accordingly, you are once again requested to transfer all balances belonging to federal government owned MDAs using the CBN Payment Gateway to the appropriate TSA accounts at CBN and close the accounts immediately. Furthermore, you are to provide evidence of compliance by forwarding schedule of accounts and balances transferred in both soft and hard copies for the attention of Director (Funds), Office of the Accountant General of the Federal. Take note that failure to comply with this directive will attract sanctions”.

We have complied-Stanbic IBTC

In its response, Stanbic IBTC rejected the accusation saying it has been complying with the TSA directive. In a letter to the AGF signed by the Chief Compliance Officer of the Bank, Mr. Rotimi Adojutelegan, the bank stated, “We refer to your letter dated 12 May 2016 received at out office on 01 June 2016. Kindly find attached schedules for local currency and foreign currency transfers for various federal government ministries, departments and agencies as requested.
Please be informed that the bank has complied with the TSA as all funds belonging to the affected federal MDAs have been duly remitted to their respective accounts with the CBN. Do not hesitate to contact us should you have any further enquires in this regard.”

Why we allow some MDAs operate accounts-GTB

In its response to the query, Guaranty Trust Bank explained why it has allowed some MDAs to continue to operate accounts, saying it needs clarification from the AGF on the status of the MDAs.
In a letter to the AGF signed by the Chief Financial Officer of the bank, Mr. Adebanji Adeniyi and General Manager Wholesale Banking, Miriam Olusanya, GTBank stated: “We refer to your letter referenced Funds/TSA/24/1 and dated 12th May 2016, but received by GTBank on June 1, 2016.
We wish to state that we have been complying with the Presidential directive on the transfer of balances on federal government’s ministries, departments and agencies account to the TSA. The bank fully remitted all the balances standing to the favour of FGN MDAs account to the TSA account on September 15, 2015 and October 16, 2015 respectively. However, subsequent inflows into the MDAs account was permitted based on the instruction of the CBN and these funds have been consistently swept / transferred into dedicated TSA accounts on daily/weekly basis as deemed fit/agreed with various MDAs
“Therefore, the balances with us on the various MDAs as at June 1, 2016 relates to: Subsequent inflows into agreed MDAs account which have not been transferred; balances/funds in certain MDAs accounts previously transferred by us but returned back to the bank: Balances/funds in the account of Abuja MDAs, Military, WAEC and other grey areas on which we require clarification are as disclosed in Appendix 3
“It is pertinent at this point to state that we have transferred all the balances in Category A as listed in Appendix 1 and subsequently closed the affected accounts.
We seek clarification on what to do with the balances under category B and C as listed in Appendix 2 and 3 respectively and have provided a brief on the operational dynamics of some of the customers within these categories B and C:
“Treatment of Federal Inland Revenue Service (FIRS) accounts: The FIRS maintained accounts with the Bank for the purpose of tax collection from the members of the public. The current practice is that the Bank collects the revenue on behalf of FIRS using the dedicated Pay Direct platform and subsequently sweeps the collections from these accounts to the Federation account as soon as FIRS initiates a debit request through NIBSS.
“We are of the opinion that closure of the FIRS accounts with the Bank will make it difficult for members of the public to pay their taxes to FIRS. We therefore seek the position of your esteemed office on whether the FIRS accounts with the Bank should be closed or the Bank should continue to operate the accounts.
“Treatment of Abuja Accounts: The Bank maintains accounts of some Abuja Parastatal and Agencies, notable among these are Abuja Environmental Protection Board, Abuja Technology Village Free Zone, FCT Water Board, Abuja Geographic Information System, among others. Please refer to Appendix 2 for the full list of
these accounts.
We are maintaining these relationships based on the Customers claim that the Agencies and Parastatal were set up to serve the FCT reminiscent of typical Ministries at the State level.
We therefore seek your opinion on whether the Bank should continue to operate these accounts or transfer the balances on them and close the accounts afterwards.
“Accounts of the Military, Police, etc.: Following the Presidential directive to transfer MDAs funds to TSA in September 2015, the Bank transferred the balances on the accounts of various Armed Forces which include The Nigerian Army, The Nigerian Police, The Nigerian Navy, Nigerian Air Force and Department of State Security Service (DSS). This action was met with resistance from these categories of Customers, in some instances, our branches were stormed and staff in those branches threatened and the Bank was severely warned not to make further transfer from the accounts.
The Customers posit that their inability to have easy access to their funds is slowing down their operations. In view of the threat to safety to life and property of the Bank, the Bank ceased to effect further transfer standing to the credit of these Armed Forces. We therefore seek your opinion on the way forward (transfer / closure) as regards this category of customer.
“Accounts of Paramilitary: in the same vein, the Paramilitaries have also challenged the Bank’s legality to transfer the balances on their accounts to TSA with some of them claiming that the funds in their accounts relates to membership contributions and other donations. In this category, we have Federal Road Safety
Commission (FRSC) units, Nigerian Prisons Service, Nigeria Security and Civil Defence Corps, among others. We therefore need clarification on how the accounts of these Paramilitaries should be treated.
Customs Revenue: The Customs revenue is currently being remitted to the Customs on a daily basis in line with an existing remittance arrangement. The Bank therefore seeks the position of your esteemed office on whether the Customs accounts with the Bank should be closed or the Bank should continue to operate the accounts.
“Others: Other customers which we are seeking clarification on how to treat the accounts are WAEC, Transmission Company of Nigeria, Nigerian Telecommunications limited, Cooperative Societies, NAFDAC. Independent Corrupt Practices Commission, Bank of Agriculture, Pension Funds of MDAs, Staff Clubs and Cooperative Societies of MDAs, etc. Additionally we noted that some MDAs are not profiled on REMITA and this is stalling the Bank’s ability to transfer the balances on them to TSA. Please refer to Appendix 3 for the full list.”

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