Banks Begin Massive Downsizing Over FG's TSA

The directive from the federal government that every federal government ministry, parastatal and agencies should begin remitting its earnings into a Treasury Single Account (TSA) have had a spiral effect on the Nigerian banking industry.

Since the announcement, commercial banks in the country have reportedly started sacking some of their staff as they can no longer afford to keep them.

This is because of the massive withdrawals of funds by the agencies from their existing accounts in compliance with the government’s directive.

According to a source who is a top management staff of one of the first generation banks, his bank laid off one thousand staff nationwide adding that the mostly affected in the downsizing exercise are desk officers.

The source told Leadership that the closure of government accounts with commercial banks has left the banks with no other option than to reduce its work force.

It would be recalled that the banking sector is the highest employer of Labour in Nigeria.

The source opined that the TSA policy is capable of grounding a lot of commercial banks even though it is designed to ensure accountability and transparency.

“As I speak with you now, about one thousand of our staff are already on their way out, because we can no longer accommodate them, but what we have done is to lay off more of the desk officers,”he said.

Speaking on why the desk officers were mostly affected, the source said: If you lay off those who go out to look for deposits you will worsen the situation, so we have to look at the survival of the bank first, the consequence of allowing desk officers to stay and sacking those who bring deposits will be higher, so we took the safer option of letting desk officers go”.

“The truth of the matter is that some of these deposits, especially fixed deposits help the banks a lot, now, there is directive that government funds be withdrawn, on one hand it will ensure accountability, but on the other hand the banks will also have to reduce their staff strength or be ready to recapitalise.

Another source said another new generation bank laid off 1,500 staff yesterday for the same reason. Although he added that those affected were those on temporary appointments.

“The problem is that, if you lay off permanent staff at once, you also have to pay them all their entitlements otherwise they will take you to court. Yes, majority of the people we truly do not need are unfortunately the permanent staff, but because of the confusion and litigation that will follow, we decided to relief those with temporary appointments. It is a painful decision, but we have to do it in other to save the banks.

“We have prepared their disengagement letters and most of them will be communicated next week. I tell you, not only here, all the banks will follow this line. That is the situation,” he said.

A staff of another new generation bank who was a victim of the sacking spree said: ”I got my letter of disengagement on Thursday, I was devastated, but at the same time I knew it will get to this point, because most of the commercial banks in Nigeria have very fat accounts of government agencies and ministries that runs into billions of naira.

“Some of these funds are not withdrawn for six months or even more and banks trade with them and make profits. So once you shut that angle of business certainly the banks will bleed, so if, other people did not expect sacks, then they must be day dreaming”.

Last week, the Kaduna state deputy governor, Bala Barnabas Bantex, revealed that N24 billion was recovered by the state government in 423 bank accounts in the state as a result of the government’s decision to begin remitting its earnings into the TSA.