Abstract

The federal governments' ministries, departments and agencies operating multiple accounts with various deposit money banks all over the country has led to alleged fund leakages and corruption. However, Treasury Single Account (TSA) introduced to correct the anomalies seems to create liquidity problem for deposit money banks in Nigeria due to cash mopped up from the system. This study examined the relationship between Treasury Single Accounts and liquidity of deposit money banks in Nigeria. The descriptive cross-sectional survey research design was adopted and 441management staffs and customers of twenty-one banks were purposively selected for the study. One-way- Analysis of Variance and Pearson Correlation Coefficients were adopted for data analysis and hypothesis confirmation. The results of the study confirmed that treasury single account has a positive and significant impact on liquidity performance of deposit money banks in Nigeria (r = 0.8596;p < .05). This showed that funds moped up from deposit money banks would generate liquidity crisis and would have spillover effects on Nigerian economy in general. The study therefore recommended that deposit money banks should concentrate on their core mandate of financial intermediation.