Bankers' Committee Shrugs Off Effect of Treasury Single Account

Director/Chief Executive Officer, Fidelity Bank Plc, Mr. Nnamdi Okonkwo,
  

Says TSA will not slow down lending growth nor drag down banking operations

Obinna Chima

The Bankers' Committee yesterday said their full compliance with the Treasury Single Account (TSA) would not slow down lending growth in the country nor drag down their operations as had been widely predicted.
They also maintained that the banking industry remains strong is spite of the take off of TSA.

Speaking at a media briefing at the end of a Bankers' Committee meeting in Lagos, the Group Managing Director/Chief Executive Officer, Fidelity Bank Plc, Mr. Nnamdi Okonkwo, said the committee reviewed the impact of the TSA, which became effective on September 15.
He put the total value of the cash reserve requirements released on account of the TSA implementation at N740 billion.

"We reviewed the effect of the TSA. But it is important to do a historical background on the TSA. The first time this policy was implemented in 1989, some little turbulence was witnessed in the banking industry. Maybe that is why a lot of people are so skeptical about what it would do to the banking system.
"But I am pleased to inform you that after the review and after the compliance, the industry liquidity has remained strong because this was done systematically.

“No bank was distressed on account of that. It is also important to understand that it has two implications – the corresponding leg of cash reserve requirement (CRR) would be released to banks on account of returning the deposits that was previously with them. Just to say there is no alarm on account of the movement of funds to the TSA,” he explained.

On her part, the Director, Banking Supervision, Central Bank of Nigeria (CBN), Mrs. Tokunbo Martins, said the committee at the end of the meeting was satisfied that the banking industry remains safe and sound.

She stressed: “We need to sustain this to continue having the kind of safe and sound banking system that we have now. So, the committee agreed that in addition to the measures we have in place right now, banks on their own would improve their risk management processes and hold sufficient capital to ensure that no matter the risk of shocks that emanates, banks would be prepared to withstand it."
Also, the Group Managing Director/Chief Executive Officer, First Bank of Nigeria, Mr. Bisi Onasanya, commended CBN's forex policy.

"We all agreed that JP Morgan issue has taken place, but what is important is that we have been able to through effective demand management conserve our reserves. We all agreed that irrespective of the effect of JP Morgan delisting, we have to preserve our forex reserves for Nigerians and we would continue to do what is best for Nigerians. We all agreed that we would continue to supply forex to prioritised segments of the economy," he said.

Speaking on the deadline for the Bank Verification Number (BVN), the Chief Executive Officer, Ecobank Nigeria Limited, Mr. Jibril Aku, warned that there would not be another deadline extension. According to him, the October 31 deadline stands.
"We don't want what happened the other time where there was a rush towards the end of the deadline.

We want to make sure that we continue to sensitise bank customers so that they would come and do their BVN because there would be no further extension. Once that deadline passes, you will not be able to operate that account. All efforts have been made to ensure that the registration process is seamless for customers to come and obtain their BVN. With 28 days to the deadline, we are reaching out to customers to come and enroll for theirs.

"Facilities have been made available for Nigerians in Diaspora to enroll and if they go to the embassy or the branch of any Nigerian bank in their jurisdiction, they would be able to do the registration. We also have a consultant for those in the Diaspora. While it is free at the embassy or the branch of any Nigerian bank, the consultant can do it for a fee. We have seen the progress going on, but we want the customers to know that these deadlines would be enforced. We don't want five days to the end of the month, we would see the crowd we saw the other time," Aku added.