The Impact of Treasury Single Account (TSA) on the Economic Growth: The Case of First Bank Nigeria Plc

Abstract

This research looked at effect of Federal government Treasury Single Account (TSA) policy on economic growth and development in Nigeria. This policy has succeeded in re-domiciling government account from Commercial Banks to the Central Bank and made the Commercial Banks to be charging their interests on remittances to this account. The study evaluated the following objectives: to know the effect of treasury single account on bank liquidity: to evaluate the effect of treasury single account on bank deposit; to assess the effect of treasury single account on bank interest rate; to know the effect of treasury single account on bank loans. Evidence from analysis suggests that interest rate and treasury single account are positively related. Bank liquidity, bank deposit and bank loans are found to be negatively related with treasury single account. The following are hereby recommended: Banks should imbibe the culture of increasing customer deposits by aggressive marketing; Bank should give loans to businesses that have high expected monitory returns, interest rate of banks should consider the nature of business and ability to pay so that borrowers would not be discouraged, government should implement treasury single account to the letter, so that banks would sit up to their traditional functions.