Will Heritage Bank sink if it remits money collected on behalf NPA to TSA?
The pursuit of Heritage Bank by the Nigerian Ports Authority (NPA) over the remittance of revenue funds collected on its behalf which started since the emergence of Hadiza Bala Usman as the managing director of the agency is becoming endless and elusive.
Business Hilights recalls that when Usman was appointed to head NPA, she ordered an audit of the agency and discovered several financial infractions including huge revenues belonging to NPA that were not remitted to the Treasury Single Account (TSA).
Whereas some banks have struggled to complete their remittance to the TSA, Heritage Bank is still holding back a substantial amount (value with held) of collected revenues belonging to NPA.
Swiftly, Usman approached the Central Bank of Nigeria (CBN) who brokered a payment arrangement between NPA and the bank.
But more than one year after, the managing director of NPA has made it clear that even the efforts of the apex bank had failed to compel Heritage bank to comply.
The non-payment of the money was reechoed by Usman during her recent TV interview where she averred that Heritage Bank is yet to remit money collected on behalf of the Authority.
Financial analysts had raised questions on whether banks should be dependent on deposits by customers or capital it made from investments it went into.
Experts say capital base of any bank should be viewed in terms of its liquidity ratio and not the amount of customers’ deposits.
Besides, revenues collected on behalf of an agency should not be seen by any banks as its corporate fund, but just a cash in transit, using the bank as a route to the resting place of the money possibly after deducting handling charges.
However, observers say at any point a bank is resting on deposits for a government agency that is supposed to be moved to the TSA, it is an indication of high level stress.
Sometime last year, the apex bank made a move to subject Nigerian banks to another round of stress test, but was pushed aback due to the recession which the economy suffered within the period.
But the question remains that when a bank is shoring up its liquidity ratio with money meant for onward transmission to TSA, is it safe and strong?
