Regulatory Alerts2007-12-05 | BSD/DIR/GEN/CIR/VOL.1/018Circular to Government Revenue Collecting Banks - Ensuring Timely Remitance of Government Revenue by Deposit Money Banks
The Central Bank of Nigeria (CBN) reminds government revenue collecting banks of their responsibility to remit government revenue on time. In 1999, the CBN delegated its retail banking role with the government to deposit money banks. Since then, these appointed banks have been required to submit all collections within an agreed timeline. However, the CBN has observed that some banks fail to meet these deadlines, particularly when collecting funds on behalf of Nigeria's National Petroleum Corporation (NNPC) from its depots across the country. This issue disrupts the Federation Accounts Allocation Committee meetings and distribution of revenue to federating units, negatively affecting monetary policy execution due to the NNPC account's size. The CBN warns it will no longer tolerate this behavior and demands that all future revenue collected on behalf of NNPC be submitted within 24 hours after receiving payment instructions from NNPC, failing which their accounts will be debited accordingly. Defaulting banks risk being prohibited from collecting future revenues for both the NNPC and other government parastatals. The CBN seeks continued cooperation and support from all affected institutions.
CENTRAL BANK OF NIGERIA Business Central Area District P.M.B. 0187 Garki, Abuja 09-61638445 09-61638455 (Fax) November 27, 2007 BOD/DIR/CIR/2007/GEN/03/001 CIRCULAR TO GOVERNMENT REVENUE COLLECTING BANKS ENSURING TIMELY REMITTANCE OF GOVERNMENT REVENUE BY DEPOSIT MONEY BANKS It would be recalled that the Central Bank of Nigeria (CBN), in 1999 delegated its retail banking role with government to the deposit money banks. Since then banks have been the main revenue collecting agents for government and its agencies. Under this arrangement all appointed banks are required to remit all revenue collections into the pool accounts at the CBN, within an agreed timeline. The CBN is however worried that notwithstanding the appeals to the revenue collecting banks, some do not remit their collections as and at when due especially the collection on behalf of the Nigeria National Petroleum Corporation (NNPC) from its depots all over the country. This has led to the postponement of the Federation Accounts Allocation Committee (FAAC) meeting dates in some instances; thus disrupting the distribution of revenue to the federating units. In addition, this unethical practice undermines the effective conduct of monetary policy given the size of the NNPC account. The CBN warns that it would no longer tolerate this attitude. Thus, all revenue deposits collected on behalf of NNPC from all its depots should be paid into the CBN within twenty-four (24) hours of the exact value date indicated on the NNPC payment instruction to banks, failing which the CBN shall debit the accounts of the affected banks in the CBN. Banks, whose accounts get overdrawn because of the direct debit, shall pay double the penalty for overdrawn accounts. In addition, defaulting banks risk being stopped from collecting revenue for NNPC and other parastatals. We will continue to count on your support and cooperation. J.K.A. Olekah Director, Banking Operations Department