Apr 11 2012
CBN Warns Banks on FG Funds
By Obinna Chima
Central Bank of Nigeria
In fact, the banking sector regulator said that any bank that keeps such funds beyond the stipulated one working day would be made to pay interest
on it.
The CBN stated this in its “Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2012/2013,” signed by the governor, Mallam Sanusi Lamido Sanusi, just as it declared its readiness to go ensure that excessive charges on customers’ accounts as well as high interest rates payable on deposit accounts in the industry is put to an end.
The guidelines posted on the CBN’s website said: “Banks shall continue to remit VAT, customs duties and other collections on behalf of the federation and the Federal Government by the next working day. Accordingly, banks that keep such collections for more than the stipulated period shall pay interest as may periodically be determined by the CBN.
“Revenue collections not remitted within the stipulated period shall continue to form part of the banks’ deposit base for the purpose of computing their Cash Reserve Ratio (CRR) and Liquidity Ratio (LR).”
Commenting on the charges and interest rates, the apex bank said that the Inspectorate Department of each bank would continue to be responsible for cross-checking bank charges and interest rates payable on deposit accounts.
It directed that: “Where the department discovers any non-payment or under-payment of interest on deposits, other entitlements, excessive interest and bank charges, a return thereon shall be made to the central bank within two weeks from the date of discovery by the Inspectorate Department of the bank or date of receipt of customer complaint.
“Under-payment and/or excessive interest and other charges shall be refunded within two weeks of the discovery/customer complaint to the CBN, with interest at the bank’s maximum lending rate on the date of refund, along with a letter of apology to the customer,” it said.
“Any bank that fails to comply with this provision shall, in addition to the refund to the customer, be liable to a penalty amounting to 100 per cent of the amount involved.”
The guideline also revealed that the pilot scheme of the FGN implementation of the Treasury Single Account (TSA) would commence this year.
“The scheme is designed to consolidate the accounts of the FGN with the CBN and DMBs into a single or connected system of accounts domiciled at the CBN. “In exercise of its role as banker to the Federal Government, the Ways and Means Advances window shall continue to be available to the FGN at any time in financing temporary liquidity needs to a maximum of 5 per cent of the previous year’s actual collected revenue of the FGN and such advances shall be liquidated as soon as possible and shall in any event be payable at the end of the federal government’s financial year in which it was granted,” it also disclosed.
The guideline said that the minimum capital ratio for commercial banks with international banking license going forward, would be 15 per cent while that for regional and national banks remains at 10 per cent.
“At least 50 per cent of a bank’s capital shall comprise paid-up capital and reserves, while every bank shall maintain a ratio of not less than one to ten (1:10) between its adjusted capital and total credit, net of provisions. However, banks are encouraged to maintain a higher level of capital commensurate with their risk profile,” it explained.
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