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Eight Years After, Banks Still Withholding TSA Funds…Reps Adhoc Committee Panel.

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The House of Representatives Adhoc Committee investigating the application of recovered loots has once more discovered violation of the Treasury Single Account, TSA, remittance guard lines, by institutions entrusted with such responsibilities.

The TSA regulation was established, September 15, 2015. That was the date all commercial banks and other agencies, were required to transfer all government agency accounts in their possession, that fall within the TSA guideline, to a single treasury account, domiciled with the central bank of Nigeria, CBN.

 

At its sitting August 31, the committee among others things, stated that Wema bank for instance, has outstanding of such agency amount of Eight three million, Ninety seven thousand, three hundred and eighty two naira sixty three kobo, (N83,97,382.63), not yet remitted to TSA account as of date.

In addition to that, says the committee, the bank still has as its default liability, the total sum of Forty One Billion, Eight hundred and Sixty three million, four hundred and forty five thousand, four hundred and forty three Naira, seventy eight kobo N41,863,445,443.78. This is the amount the bank failed to remit within the stipulated time allowed by law.

 

The chairman of the Adhoc committee, Hon. Munachim Alozie, stated that from the submission made to the committee by the bank, a total of 178 MDAs account in the possession of the bank were examined by the committee.

According to him, the bank defaulted on the exact dates it is supposed to transfer the MDA’s funds to the TSA accounts with the above amount. He said that these transfers were made in tranches up to November 2017 instead of September 15, 2015, as stipulated by law.

This is grossly a violation of the standing rule establishing the TSA, he explained. The law guiding the establishment of the TSA, he noted, requested that all funds of the government agencies affected by the TSA guidelines must be transferred to TSA account domiciled with the central Bank of Nigeria, CBN by September 15, 2015.

Any transaction involving such transfer outside this date, he explained, attracts penalty which should be paid to government. The chairman then stated, “the cumulative amount of defaulted transfers of Wema bank according to records at the committee disposal amounts to N41.8b.” “Incidentally, he claimed, “there is no evidence before the committee that the bank has paid any penalty for this breach.”

The chairman also stated that the committee noticed that the statement of account of the bank, in possession of the committee, shows that the bank was not spooled up to August 2023, as requested by the committee.

He further claimed that the committee has equally discovered, an amount of N83.9million, still standing as balance of Six MDAs with the bank which has not been transferred to TSA account till date.

Hon. Sundsy Umeha, deputy chairman of the committee and head of the subcommittee on strategy of the Adhoc committee, reminded Wema bank that part of the assignment of the Adhoc committee is to recover money due to the government. Their actions of non -remittance and remittance outside the stipulated time, Umeha explained, attract huge penalty which, he said must be paid to government.

Reminding Wema bank further, that it may not be the first to pay such penalty, Umeha noted, “United Bank of Africa, UBA, had recently paid about two billion Naira and above as default charges”

Meanwhile, the allegations by the committee did not go down well with Wema bank. Emeka Obiagwu, Executive Director, Wema bank, said that contrary to the committee claims, “there was no transfer made beyond December 2015.” According to him, “any transfer made outside the stipulated September 15, 2015 deadline was due to the hiccups that arose from lack of clarity on the operation of the TSA.”

“Both the banks and agencies at that period, were still contemplating which account and which agency falls under the TSA guideline,” he said. “The confusion surrounding the TSA guidelines,” he claimed, “even made some agencies to still pay money to the bank after the prescribed time limit.”

Obiagwu maintained, “it is this lack of clarity of the process, not deliberate intention of the bank that delayed the transfers.” As a proof that Wema bank is a responsible institution, he said, “even the deposits mistakenly made by agencies after the deadline, were promptly transferred to TSA accounts by the bank.”

Obiagwu insists, that the last transfer the bank made to TSA account was N875m, affirming that “the transfer was done in December 2015 and not up to 2017 as alleged by the committee.”

Obiagwu also debunked the allegation that the outstanding default amount due to the bank was N41.8b, saying, “from our records, what we have remitted outside the stipulated period of TSA deadline, amounts only to N23b, which is a huge gap from the N41.8b being alleged,” he posited. Insisting that some of such outside remittances were done between October and November 2015 and none went beyond December, 2015, as also being alleged by the committee.

But Hon. Umeha countered, saying that it is not just an allegation, “that from the record submitted by Wema Bank itself to the Adhoc committee, the transfers to TSA by the bank was still being made up to November 2017.” Umeha went on to state that contrary to Wema Bank claims that it has closed all MDAs account, there are still some fractions of fund amounting to N83m, still in the custody of the bank.

While admitting the possibility of such balance in the bank, Obiagwu, the Bank director, described such amount as “inconsequential,” saying no banking institution would want to withhold such amount for profit purposes.

But such remark rather infuriated the committee members who charged, saying, “using the word inconsequential by the bank, amounts to underestimating the importance of the duty of the committee”

Hon. Inuwa Garba, a member of the committee, described the statement of the Wema bank director as frightening, saying, for the bank to say that N83m uncovered by the committee is inconsequential in the face of the obvious major economic challenges, he gloated, “means a neglect of the bank to the importance of the assignment of the committee.” Hon. Inuwa however, promised, that “the committee is ready to do all it takes to make Nigerians smile again,” Saying it is now obvious that, “Banks are part of the major problems we are facing in Nigeria.”

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