Banks threaten to stop using their platforms for TSA

Nigeria’s Treasury Single Account (TSA) regime formulated by the Federal Government to  shield its resources from pilfering  may experience a flop, following  hints that lenders are planning to stop the use of their platforms for TSA.

The grouse of the banks is the one percent transaction charge, based on the use of Remita, an e-payment and e-collection software, on their platforms.

From the transaction charge, 10 percent goes to the CBN; 40 percent goes to banks; while 50 percent goes to SystemSpecs.

Barely two months ago, the Senate passed a resolution asking the Federal Government to terminate the 2013 contract between the Central Bank of Nigeria (CBN) and SystemSpecs, developers of Remita.

Remita, an e-payments and e-collections software on a single multi-bank platform was developed by SystemSpecs and is used for Treasury Single Account.

“Banks want to pull out of TSA. This is the aftermath of the Senate’s decision on charges for transactions on TSA.

“The Treasury Single Account regime continues and nobody wants to pay the transaction fee for all collections. Like other bank products, Remita is just a software product designed by SystemSpecs and used on banks platforms”, an informed industry source told BusinessDay, yesterday.

According to the source, “the Central Bank of Nigeria got scared because it is not sure of what the National Assembly (NASS) wants to do, they stopped paying banks. Now banks are threatening not to allow TSA transactions on their platforms. This is a serious threat from banks. They want to stop using their platform for TSA”.

This resolution of the Senate was sequel to recommendations of the Senate Joint Committee on Finance; Banking, Insurance, and other Financial Institutions and Public Accounts, on the abuse and mismanagement of the Treasury Single Account Regime.

The Senate had resolved to halt further deductions the Federal Government could have paid of the N25billion contract sum to the platform provider, based on the charge of one percent transaction fee for all collections.

The Senate also asked the CBN to ensure that the total refund of the portion of the deductions were retained by the CBN and the Deposit Money Banks, (DMBs) and that evidence of compliance be to the appropriate Senate committee.

“TSA regime transaction fee of one percent for e-collection and transfer for any computation should be disregarded,” the Senate had said, just as it urged the CBN to carry out an in- house inquiry to sanitise its procedure for award of contracts, as well as identify the culprits in the purported contract.

The Senate had directed that N656.504million, instead of the claim of N7.650billion be provided as transaction costs for fund transfers and collections for the period ending November, 30, 2015.

“The amount was arrived at, using the upper end of the approved band of N700 per transaction for 937,869 transactions for the period between March 1 and November 30, 2015,” it added.

Another informed banking industry source said, “The implication of the stoppage of this is only better imagined than experienced, as it will bring national economic activities to a halt.”

The parties have argued that the one percent is fair, as the CBN governor during the senate hearing admitted that the next best alternative was priced at 1.9percent which is an international software, thereby negating the spirit of boosting indigenous capacity and the made in Nigeria campaign, a source close to this development said.

He said: “This means none of the TSA collection parties have earned fees for well over 400 days, since March 15, 2015, for providing collection services to the Federal Government when the platform began to track monies in Ministries, Departments and Agencies.”

According to him, “The fees include NPA duties, habour dues and levis; Custom excise duties, import and export duties etc; FIRS taxes; PHCN rates; FG School fees, including JAMB and WEAC; FRSC number plates etc, applicable vehicle and driver licensing fees, NYSC registration fees, Immigration passport services and other fees etc.

“The AGF said total inflow into the TSA was about N3 trillion mopped up from over 17,000 accounts of MDA’s. He added that the TSA has instilled fiscal discipline, and transparency.

“In fairness to the AGF in his submission to the Senate hearing late last year, the AGF argued that all parities to the collection deserve to be paid their dues.

“The Central Bank of Nigeria and the Accountant General of the Federation are in a dilemma over how to resolve this payment issue that has helped the Federal Government mop over N3 trillion into the TSA over a period of 12 months, ” our source further noted.

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