Nigeria's Skye Bank says fines 4 bln naira on NNPC accounts

Nigeria’s Skye Bank on Monday said the central bank has imposed a fine of 4 billion naira on its for failing to render appropriate returns on accounts of some government institutions and agencies.
In a letter to the Nigerian Stock Exchange (NSE), the commercial lender said fine imposed in it by the banking regulator was misdirected since it did not conceal any information of the those accounts from the central bank.

Emefiele, central bank governor

According to the bank, the significant portion of the money for which penalty was applied belong to the state-owned energy company NNPC Pension Funds and National Assembly Legislative Aides account balances.
The bank said the sum of 40 billion for which the fine was imposed on it came from NNPC account balances it had received a communication from the oil giant excepting it from the Treasury Single Account (TSA) operations.
Skye Bank said it received “A communication from the NNPC forwarding a letter from the accountant general of the federation on the treatment of NNPC funds.”
“By the communication, the bank was advised that an 18 business day window had been granted by the Vice president Yemi Osinbajo within which a plan for the orderly withdrawal of the NNPC funds would be implemented.”
The statement from the bank said it has commenced engagement with the central bank with a view to bringing the issues to the attention of the banking sector regulator and seeking a review of he penality.
It would be recalled that the central bank sanctioned First Bank two weeks ago for its refusal to remit about 37.55 billion naira belonging to the state-owned energy company.
The report stated that First Bank was fined 1.87 billion naira, which represents five percent of the NNPC money it refused to remit to the TSA as directed by the federal government on September 15.
According to the report, another tier-1 bank, United Bank for Africa (UBA) was also sanctioned for concealing a portion of the energy corporation’s fund totaling 58.84 billion naira. UBA was said to have been fined 2.94 billion naira for also refusing to remit the deposit of the energy firm into the TSA as at when directed.
Many Nigeria’s commercial lenders depend largely on public sector funds, while the transfer to the TSA last month led to shortage of funds in the banking system, leading to jump in the cost of borrowing at the interbank money market.
At the peak of the transfer of public sector funds to the TSA, overnight placement was quoted at 200 percent, while the interbank market frozen for over a week.