Blame game over suspension of banks from forex market

Blame game over suspension of banks from forex market

Blame game over suspension of banks from forex market

LAGOS—A heated blame game, yesterday trailled suspension of nine banks from the foreign exchange market as a result of alleged non remittance of NNPC fund into the Treasury Single Account, TSA. The banks, however, issued statements absorbing themselves of culpability. They stated that NNPC management had been kept in the picture on the funds in their possession.

The NNPC is claiming credit for the suspension, accusing the banks of holding back the funds.

CBN had listed the suspended banks as United Bank for Africa (UBA) $530m; FirstBank of Nigeria (FBN) $469m; Diamond Bank Plc. ($287m); Sterling Bank Plc. ($269m); Skye Bank Plc. ($221m); Fidelity Bank ($209m); Keystone Bank ($139); First City Monument Bank (FCMB) $125m; and

Heritage Bank ($85m).
The CBN on its part has said it is not ready to join issues with any of the parties saying it would rather let sleeping dogs lie as the process is an ongoing administrative routine. A CBN official said CBN does not want to join issues with those running to the media. This is an administrative thing; it should not be harped to heat up the market. Every body is trying to defend himself, now who is right and who is wrong. For some of the banks issuing statements ,why did they hold the money back in the first instance?
Why we reported non remitted fund to presidency —NNPC
The Group General Manager, Public Affairs Division of the NNPC, Mallam Garba Deen Muhammed claiming credit for the suspension of banks from foreign exchange market said that the corporation realised that some money were stashed in the banks which were not remitted to TSA and that was how they quickly alerted the authorities’ concern to take the necessary action. Muhammed said NNPC management discovered the delay and prompted the President on the issue. He said the management of NNPC believes in transparency and due process in the remittance of government funds.

However, FCMB one of the banks affected by the suspension in a note to its customers yesterday said “the Central Bank of Nigeria announced a temporary suspension of FCMB along with eight other commercial banks from access to the foreign exchange market. This suspension is based on the Treasury Single Account Directive, which stops banks from holding funds on behalf of government entities and instead, effect daily remittances to the CBN. For our bank, this suspension is based on our non-payment/transfer of the remaining $125million NNPC fund with us to TSA.
“As a financial institution with strong corporate governance rules, we have always fully disclosed the outstanding TSA funds in our books and have continued to work assiduously to fulfill our outstanding obligations. The members of the NNPC Management Team have been kept fully in the picture on the funds. This scenario is really because of lack of foreign exchange availability and the prevailing fall in oil prices rather than concealment or willful non-compliance by FCMB. It is actually a widespread industry issue.

UBA in a statement yesterday said “The CBN had earlier on Tuesday announced the suspension of 9 banks from all foreign exchange transactions until they remitted into the TSA over $2 billion in variousNNPC/NLNG accounts in the banks as ordered by President Muhammadu Buhari last year”. Further to our press statement of yesterday, “we are pleased to inform our valued customers, stakeholders and business partners as well as the public that the CBN has re-admitted us into the Foreign Exchange Market following our remittance of all NNPC/NLNG dollar deposits. UBA wishes to thank you all for your continued support and patronage”

Diamond Bank
Diamond Bank reacting to the suspension reassured its customers of enhanced quality service delivery and commitment to meet its banking obligations despite the announcement by the CBN that nine commercial banks (inclusive of Diamond Bank) have been barred from foreign exchange transactions for alleged infringement on the Treasury Single Account (TSA) directive last year.
Meanwhile, the Association of Senior Staff of Bank, Insurance and Financial Institutions, ASSBIFI, yesterday, said the CBN’s ban on nine banks could further weaken the banks and lead to mass sack of workers.
The umbrella body for senior workers in the financial sector, contended that though the ban might be necessary, the timing was not right for this present economy. It called for the ban to be lifted and more placid aproach be engaged in settling the matter .In a statement by President of the association, Mr. Sunday Salako, ASSBIFI said: “Research shows that CBN owed Nigerian banks up to $3 billion from unfunded letters of credit (LCs) since last year, i.e. before the TSA regime. This may leave one to wonder if the banks accusation that the CBN is trying to de-stabilise the market holds waters.”

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