The Chief Executive Officer of the Royal Bank, Osei Asafo Adjei has appealed to government not to rush with the implementation of the Treasury Single Account (TSA).
According to him, the lack of adequate time to complete the phases of the implementation of the policy may collapse the banks that have huge government deposits.
In Mr. Asafo Adjei’s view, the affected banks should be given a time period of a minimum of a year so as not to cause any systematic failures in the banking industry.
“Because the industry has been fed on government funds for a very long time, truncating it suddenly or giving us three months’ notice is not enough. A minimum of six months to one year in my view would have been more like it,” he argued.
“With enough time, people will then begin to plan because there are rumours in the industry that some banks have as much as sixty percent or more of their deposits from government sources.”
The Finance Minister, Ken Ofori Atta in presenting the 2017 budget statement to Parliament in March this year, announced the rolling out of a Treasury Single Account by the government.
The policy has since been launched and it is among other things, expected to see to the proper alignment of cash inflows and outflows in the public sector.
The aim of this is also to improve the predictability of budget implementations and cash allocations.
In line with this, the estimated 15,000 bank accounts of all government institutions will be transferred to the Central Bank for easy management and monitoring.
The Finance Minister in a recent interview with Citi Business News also admitted that the potential impact of the swift transfer of cash would make a progressive implementation plan unnegotiable.
But Citi Business News also understands that seven commercial banks will significantly be affected by the policy.
There are therefore suggestions for such institutions to embark on massive deposit drives and protect themselves from any possible shocks.
By: Anita Arthur/citibusinessnews.com/Ghana