Business
Banks steps up measures to ration foreign currency sales
Banks have stepped up measures to ration foreign currency sales to its customers, using their naira debit cards for overseas withdrawals to beef up Nigeria’s dwindling forex inflow
Nigeria’s largest DMB by market size, Zenith Bank Plc, has announced a review of the usage of its naira card for international transactions.
In a notice to its account holders, Zenith Bank disclosed that it had suspended the usage of its naira card for cash withdrawals on the International Automated Teller Machine (ATM). It also halted point of sales (POS) transactions on the International Automated Teller Machine, stating that its latest management decision was due to economic reality.
Part of its board decision included reduction of the monthly spend limit for international web transactions by 80 percent, as Zenith Bank reviewed the card limit to $20 from $100. The Tier-1 lender directed account holders who need a higher international spend limit to approach its branch, and “request for a foreign currency debit or prepaid card, which are available in US Dollar, Pounds and Euro variants.”
The notice reads: “Please be informed that we have temporarily suspended the use of Zenith Bank Naira cards for International Automated Teller Machine (ATM) cash withdrawals and POS transactions.
“Additionally, the monthly card International spend limit for web transactions has been reviewed from $100 to $20. This review is in response to today’s economic realities.
“If you have higher International spend requirements, visit any of our branches and request for a foreign currency debit or prepaid card, which are available in US Dollar, Pounds and Euro variants.
The United Bank of Africa (UBA) had taken a similar move, lowering the international spending limit on its naira card from $100 to $20 a month. Guaranty Trust Bank has followed suit.
At a press conference addressed by the CBN Governor, Godwin Emefiele, earlier in February the apex bank revealed that the Bankers Committee had introduced the ‘RT200 FX’ programme to enhance repatriation of non-oil export proceeds to boost liquidity in the market.
The ‘RT200’ FX which stands for the ‘Race to $200 billion in Forex Repatriation’ constitutes a blueprint that will enable Nigeria to attain the sky-high goal of $200 billion repatriation, exclusively from non-oil exports over the next three to five years.
Analysts say that banks tend to limit the amount that Nigerian customers can transact with their naira cards overseas whenever there is increased risk of dollar shortages domestically.
The reserves fell further by $175 million in February to $39.9 billion, despite the upturn in the price of crude oil, the country’s main source of foreign exchange.
While oil exports account for about 90 per cent of foreign-exchange earnings, higher prices have failed to boost foreign reserves for Nigeria, Africa’s largest crude producer, due to lower than normal output, even as part of the export barrels go to fund gasoline imports for local consumption at subsidised prices.