Banks must now get FRC’s go-ahead before lending to states

Commercial banks in the country are henceforth regulation-bound to get the nod of the Fiscal Responsibility and Commission (FRC) as parts of the precedent conditions for lending to state governments, the industry watchdog declared on Sunday.

The policy, a component of the Fiscal Responsibility Act (FRA), 2007, equally demands the publication of the budgets of states every year and budget implementation performance reports online each quarter.

States will adopt Treasury Single Account, Public Sector Accounting Standards, Government Integrated Financial Management Information System and other reforms of public financial management in the wake of the coronavirus crisis, FRC said in its communiqué on policy framework for consolidating prudence, fiscal responsibility and accountability at sub-national levels, issued in Abuja.

Operating Surplus Template, Charts of Accounts, Medium-Term Expenditure Framework, Integrated Payroll and Personnel Information System and Medium Term Sector Strategy form parts of the regulator’s policy prescriptions for states.

FRC, whose recommendations derived from the deliberations at a recent regional think-tank session, similarly believes wide uptake of information, communication and technology and capacity development will do states’ fiscal responsibility process much good.

“The FRC should articulate and disseminate the key benefits of domesticating and implementing the FRA and the consequences otherwise, with states,” the communiqué said, citing suggestions from the conference.

There were also suggestions of keeping registers for ease of information disclosure about beneficial owners of enterprises as well as adoption of the Open Government Partnership initiative.