The Central Bank of Nigeria, CBN, has said it will mete out appropriate sanctions against Money Deposit Banks, DMBs still collecting payments under the Nigerian Content Development Fund without remitting same to a dedicated account opened for the fund with the apex bank.
The CBN said the infraction by the bank was a violation of the Single Treasury Account, TSA, policy and vowed to punish such banks.
Governor of the CBN, Godwin Emefiele, who issued the threat in Lagos yesterday at the stakeholders forum organised by the Nigerian Content Development and Monitoring Board, NCDMB, said the bank will collaborate with the agency to identify the banks, just as he warned them to close such accounts and remit the funds in their disposal to a dedicated account with the CBN.
Emefiele, who was represented by Mr. Jack Ukitefu, deputy director Banking and Payments Systems Department, said that the operations of the TSA began in 2015 and that all Ministries, Departments, and Agencies, MDAs, have been meant to company and as such commercial banks still collecting funds under the NCDF should have seized such collections and remit already collected funds.
“The CBN will not hesitate to sanction any of the banks identified in this act because this is viewed as a very serious offence” the governor warned.
Earlier, the Executive Secretary, ES, of the NCDMB, Engr. Simbi Kesiye Wabote said the NCDF was established by Section 104 of the Nigerian Oil & Gas Industry Content Development (NOGICD) Act of 2010.
The Act Wabote explained provides that one percent of every contract in the upstream sector of the Nigeria Oil & Gas industry shall be deducted at source and paid into the Fund.
He said the Act also gives the Board the mandate to manage the Fund and employ it for projects, programmes and activities directed at increasing Nigerian Content in the Oil & Gas industry.
The Executive Secretary stated that the agency has been working to put in place the Operating Model for utilization of the Fund and has established the NCDF Advisory Committee for efficient governance of the Fund, and creating confidence and trust of Industry stakeholders.
“The Board opened up the Fund for utilization from 2013, based on the approved operating model that segmented 70% of the Fund to financing Commercial interventions and 30% for Developmental initiatives and activities carried out by the Board on behalf of the industry.
Under Commercial interventions, the Fund was leveraged to provide 30% Partial Guarantee to commercial banks for loans granted to oil and gas service companies towards financing project execution, asset acquisition or facility upgrade. It also provided 50% interest rebate on performing loans. Beneficiaries of the Fund include Ladol, Starz and Vandrezzer” Wabote explained.
He said further that the introduction of the TSA policy by the Federal Government and the need to deepen accessibility of the Fund for critical activities created the need to re-engineer the Operating Model of NCDF
He said the Board has fully complied with the TSA policy by opening Naira and foreign currency accounts in CBN, into which all NCDF remittances are to be made.