States to be paid interest on allocation from FAAC
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According to a statement made available by the apex bank, “any interest accruing on the amount from the date the banks are credited by the CBN to the date the funds are paid into the domiciliary accounts of the states shall be transferred to the beneficiary”.
Apart from that, it also states that banks themselves shall also pay appropriate interest on the balance in the domiciliary accounts pending utilisation of the funds by the states.
But contrary to earlier reports, states may not be going around with dollars in their coffers. The apex bank in the statement said banks shall not be allowed to effect disbursement of funds from the accounts to the states in US dollar.
“Drawings from the accounts shall be made only in naira at the prevailing inter-bank exchange rate on the date of the request from the states”, it said.
It however states that states can utilise the funds in their accounts to effect off-shore payment in respect of eligible transactions including opening of appropriate documentation and authorisation by state governments.
It explained that the CBN shall transfer the US dollar amounts to the respective states to the offshore Foreign Exchange Market (FEM) accounts.
Also, it warned that banks shall credit the domiciliary accounts of the beneficiary states with amounts allocated to them as soon as the accounts are created.
It explained that the recent move is sequel to the payment of the Paris Club Debt from the excess crude and petroleum Profit Tax (PPT) accounts.
It was then observed that some states had excess deductions from their statutory allocations in the process of effecting the payment.
Apart from that, it also states that banks themselves shall also pay appropriate interest on the balance in the domiciliary accounts pending utilisation of the funds by the states.
But contrary to earlier reports, states may not be going around with dollars in their coffers. The apex bank in the statement said banks shall not be allowed to effect disbursement of funds from the accounts to the states in US dollar.
“Drawings from the accounts shall be made only in naira at the prevailing inter-bank exchange rate on the date of the request from the states”, it said.
It however states that states can utilise the funds in their accounts to effect off-shore payment in respect of eligible transactions including opening of appropriate documentation and authorisation by state governments.
It explained that the CBN shall transfer the US dollar amounts to the respective states to the offshore Foreign Exchange Market (FEM) accounts.
Also, it warned that banks shall credit the domiciliary accounts of the beneficiary states with amounts allocated to them as soon as the accounts are created.
It explained that the recent move is sequel to the payment of the Paris Club Debt from the excess crude and petroleum Profit Tax (PPT) accounts.
It was then observed that some states had excess deductions from their statutory allocations in the process of effecting the payment.
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