EFFECT OF TREASURY SINGLE ACCOUNT ON THE PERFORMANCE OF NIGERIA BANKS
chapter One
1.0 Introduction
1.1 Research background
Treasury Single Account activity is mostly found in commercial banks in Nigeria’s banking sector. The banking sector is the engine of every country’s economy. A nation’s economic standing depends on how stable its banking industry is. In other words, every issue that affects banks also affects the economy of a country (Kanu, 2016). In Nigeria, commercial banks were custodians of state funds. Nigeria’s banking system has undergone several reforms and policies. Many banks have not survived these reforms. Before the TSA was introduced, Departments, Departments and Agencies (MDAs) operated various commercial bank accounts. The MDA will use a portion of the funds generated for operating funds and transfer the rest to the association’s account. The result was information leaks, misappropriation of funds, and poor budgets and financial planning. But the main beneficiaries of this situation were banks. Banks relied on deposits from government agencies and lent to the government at high interest rates. But banks no longer mobilized funds from other sectors of the economy, so they practiced “armchair banking.” In light of this, the federal government has ordered all her MDAs to close their commercial bank accounts and transfer funds to association accounts at the Central Bank of Nigeria. This was sent on his CBN circular number BPS/CSO/CON/DIR/01. /. 079; issued to all Depositary Banks (DMBs) on 25 February 2015. The circular was entitled “Commencement of Federal Independent Tax Collection System Under the Single Treasury Account (TSA) Initiative.” The TSA is a government bank account consolidation structure that enables the consolidation and optimal use of government cash. Through this bank account, or a series of linked bank accounts, the government processes all receipts and payments and always has a consolidated view of cash positions (Yusuf, 2016). Prior to the introduction of the TSA, Nigeria had fragmented banking arrangements for income and payment transactions. These included her over 10,000 bank accounts in multiple banks, making it impossible to create a consolidated government cash position at any time. As a result, pockets of unused cash balances were kept in her MDA account when the government stopped borrowing money (Obinna, 2015). (Yusuf, 2016) adds: In this context, this study aims to examine the impact of a single treasury account on performance using Zenith Bank as a case study.
1.2 Problem definition
A major challenge facing most regions of the world, especially developing countries like Nigeria, is achieving efficient resource allocation and a stable business cycle. A key component to the efficient management and administration of state cash is a unified state banking structure. Such uniform banking rules should be designed to minimize government borrowing costs and maximize the opportunity cost of cash. This requires the cash received to be available to implement government spending programs and make payments on time. Many emerging and low-income countries have fragmented systems for handling government revenues and payments. In these countries, Treasury/Treasury lacks a unified view and centralized control over government cash. As a result, this cash sits in the bank accounts of many appropriations agencies for long periods of time as governments continue to borrow to run their budgets. For these reasons, the current global revolution in government accounting is most likely after Nigeria initiated and implemented the Treasury Single Account (TSA) and a number of other economic policies that helped manage the economy better. has become important.
1.3 Purpose and objectives of the research
The main objective of the research work is to determine the impact of individual financial accounts on the performance of commercial banks in Nigeria. Other specific objectives of the research work are:
1. Determine how the Treasury Single Account (TSA) has improved financial records for commercial banks
2. Examining the impact of Treasury Personal Accounts on bank liquidity
3. Examining the impact of Treasury Accounts on the performance of commercial banks in Nigeria
4. A Study of Factors Affecting the Introduction of Unified Treasury Accounts in Nigeria
5. To provide solutions to the above problems
1.4 Research question
The survey asked the following survey questions to identify the above objectives: The research question was formulated as follows.
1. How does a Treasury Single Account (TSA) improve financial records for commercial banks?
2. How will personal accounts in the Treasury affect bank liquidity?
3. How does the Treasury Account affect the performance of Nigerian commercial banks?
4. What are the factors affecting the implementation of the government treasury single account in Nigeria?
1.5 STATEMENT OF RESEARCH HYPOTHESIS
HYPOTHESIS 1
H0:
treasury single account does not enhance the performance of commercial banks in Nigeria
H1:
treasury single account enhances the performance of commercial banks in Nigeria
HYPOTHESIS 2
H0:
the implementation of treasury single account has no significant effect on fraud detection and prevention in commercial banks in Nigeria
H1:
the implementation of treasury single account has no significant effect on fraud detection and prevention in commercial banks in Nigeria
1.6 SIGNIFICANCE OF STUDY
The study the impact of treasury single account on the performance of commercial banks in Nigeria will be of immense benefit to the federal government of Nigeria, the Zenith bank of Nigeria, the commercial banks in the Nigeria, the ministries and other government agencies in Nigeria, the study will also be of great benefit to the citizens of Nigeria as proper budget and fund allocation to both the state and local government of Nigeria will be done appropriately. Finally the study will also benefit students and other research that wishes to carry out similar research on the above topic.
1.7 SCOPE OF STUDY
The study the impact of treasury single account on the performance of commercial banks in Nigeria will be limited to Zenith bank in Nigeria, from the time of implementation to date
1.8LIMITATION OF STUDY
FINANCIAL CONSTRAINTS:
financial constraints tends to impede the speed of the research student to buy materials and visit other areas of the federal government sector to get information and other materials concerning the research topic but the researcher was able to get meaningful information concerning the research topic.
TIME CONSTRAINTS:
this researcher still being a student must be involved in one or two departmental activities like seminar presentation, submission of assignment, attendance to lectures etc but the researcher was able to meet up with the time allocated for the completion of the research work.
1.9 DEFINITION OF TERMS
FINANCIAL LEAKAGES:
refers to outflow from a circular flow of income model.
TSA:
Treasury single account is a financial policy introduced by the federal government of Nigeria in 2012 to consolidate all inflows from the country’s ministries, departments and agencies (MDAs) by way of deposit into commercial banks, traceable into a single account at the Central Bank of Nigeria.
TRANSPARENCY:
a positive and clear financial statement of Nigeria
REFERENCES
Adeolu I. A (2016). What you need to know about the Treasury Single Account (TSA) system. [(2010), Ministry of Finance]
Isaac.A (2015), The economic impact of the US Treasury Single Account (TSA). (unpublished paper)
Canoe & Oyms. (2015). SME financial exclusion
Business and Poverty Alleviation:
Nigerian experience. “Archives of Business” Studies, 3(4), page. 63-77. Sailendra Pattanayak and Israel Fainboim (2010), Treasury Single Account:
Questions about concept, design and implementation. Fiscal Affairs Department (IMF Working Paper
Taiwo .O..(2015), Will the new Ministry of Finance keep a single account (TSA) for taxes? PWC Nigeria.
UdomaUdoUdoma (2015), TSA and Implementation of the Nigerian Economy, Chairman of the National Planning Commission. Nigeria. (unpublished paper)
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