By Omoh Gabriel
The liquidity problems being experienced by banks deepened over the weekend as about 25 out of the 89 banks operating in the country were sent out of clearing. The affected banks’ payment instrument will no longer be accepted by other banks for purpose of inter bank clearing. This will continue until the affected bank up date its account with its settlement bank. Banks are usually suspended from clearing when the balance in their accounts can not meet the daily withdrawal needed to settle inter bank transactions. Also one of the settlement bank is said to be affected by the recent cash crunch and have been barred from the clearing arrangement. In this particular case the bank account with the CBN is said to have been over drawn without the beefing it up. Banks affected by the withdrawal are those which rely mostly on public sector funds. Since the Central Bank CBN started the withdrawal of public sector funds in a bid to check rising inflation, banks have been hooked by liquidity problems. Two weeks ago the Central Bank announced its intention to withdraw some selected public sector parastatal’s funds from banks. The heightened liquidity problems arose from the action of the CBN in debiting the account of banks holding parastatal’s funds over the weekend.
The CBN had last week disclosed that it has written to banks holding NNPC funds that it would debit their accounts to the tune of public funds in their vaults. The CBN it was learnt made good its promise and debited the accounts of the affected banks. The CBN action it was gathered put the 11 unsound banks and the 14 marginal into difficulty
Before the CBN action some of the parastatals had argued that such withdrawal will not be in the interest of the economy. The NNPC had last week in a statement denied knowledge of any CBN directive asking federal government parastatals to withdraw their funds from banks. It had argued that withdrawing its money from the banks now will hurt its operations and might create chaos in the petroleum products distribution system. The NNPC the biggest federal parastatal is said to have deposited close to N46 billion in money deposit banks.
According to a statement by Dr. Levi Ajuonoma NNPC spoke man, This fund is not surplus money but operational money.
But the CBN Deputy Director corporate Affairs had said last week that the parastatals had no choice but to comply. Ede had promised that the CBN was not going to debit the banks of the whole money totally N74.5 billion.
Other public sector corporation which account may have been withdrawn are The Nigeria Petroleum Technology Development Fund(NPFTD) N8 billion, Nigeria Telecommunication Limited(NITEL) and the Bureau of Public Enterprises. Since the CBN started the withdrawal of public sector funds the banking industry has been thrown into turmoil. While the CBN has admits withdrawing N8 billion, banks say the entire N74.5 billion has been withdrawn.
