Finance Minister warns of banks shutdown over Treasury Single Account

Government has cautioned banks which are likely not to cooperate with the implementation of the Treasury Single Account (TSA) to come on board or risk shutting down.

According to the Public Finance Management Act (PFMA), which establishes the TSA, the initiative is to serve as an account into which all government cash including monies received by covered entities shall be deposited and from which all expenditure of government and entities shall be made, among other demands.

Local banks in Ghana have claimed inability to comply with government’s directive to transfer monies held by government entities with local banks to the Central Bank under the TSA.

The TSA, according to Finance Minister Ken Ofori Atta, will ensure a robust macro-economy and so needs a collective effort at implementing it.

He says it is essential to have all banks on board given cost of interest on domestic debts.

Mr Ofori-Atta has, meanwhile, said banks which do not comply are likely to be shut down.

“There are a lot of penalties the banks can face.
But we are hoping that we will all put our shoulders to the wheels and get this running,” he said, “but banks who do not comply will risk having the Central Bank shut them down.”

Reserving requirement demands

Meanwhile, the Ghana Association of Bankers wants the government to reduce the reserving requirement from 10 per cent to 6 per cent.

The reserving requirement is the percentage banks pay on deposits collected from customers.

President of the Association Alhassan Andani says 10 per cent is on the high.

“The Bank of Ghana wants us to send 10 per cent of reserving requirements and that is too high. I believe it should be reduced to limit the shock of liquidity that the TSA will bring to banks.”