Reason: Deposit Money Banks in the
country have cut the amount that their customers can spend using their
debit and credit cards abroad by between 70 and 90 per cent.
Investigation by our correspondent
revealed that from the first week of December, majority of the banks in
the country had made drastic cuts to their customers’ card spending in
foreign currencies from the annual $50,000 allowed by the Central Bank
of Nigeria to between $5,000 and $15,000.
The amount include all spending by
Nigerian customers abroad, either through ATM cash withdrawals or
purchases made via PoS terminals in shopping malls, and purchases made
in Nigeria through online or e-commerce sites but whose payment is
denominated in foreign currencies.
The development means that Nigerians
planning to travel overseas during this Yuletide season will be limited
in their spending, while those who buy products through e-Bay,
Amazon.com and other e-commerce sites from within the country will also
be limited to a few items.
According to findings by our
correspondent, Ecobank Nigeria Plc has reduced its limit from $50,000 to
$5,000, with a maximum of $500 monthly and $100 daily expenditure.
Skye Bank Plc, in a notice to its
customers via email, also slashed its international card spending limit
from $50,000 to $12,000 annually, a maximum of $1,000 monthly and $100
daily.
Wema Bank Plc also slashed spending on its payment cards from $50,000 to $10,000 annually, $1,000 monthly and $100 daily.
Although other banks have yet to confirm
their new international card spending limits, findings by our
correspondent revealed that the new limits for most of them ranged from
$5,000 to $15,000 annually, and $500 to $1,000 monthly.
It was also gathered that many Nigerian
banks were owing MasterCard Incorporated and Visa Incorporated several
hundreds of millions of dollars in outstanding settlements for
international card transactions by their customers due to the scarcity
of forex in the country.
It was gathered from reliable banking
sources that the CBN could not sell enough dollars to the banks to
settle obligations incurred by their customers from the use of Nigerian
issued payment cards overseas.
A top bank executive familiar with the
development, who spoke to our correspondent on condition of anonymity,
explained, “When Nigerian bank customers use their cards overseas,
either to withdraw foreign currencies or buy things in malls via the
PoS, or buy thing online here in Nigeria but with payment in forex, Visa
or MasterCard settles the payment on behalf of the Nigerian banks most
times. They later pass the bills to us, which must be paid in dollars.
“But right now, the banks are short of
the forex to settle these companies. Some banks are owing several
millions of dollars. So, we have got to cut the spending limit on our
won to avoid settlement and reputational risks. The debts are mounting.”
The banker added, “We cannot get dollars
from the CBN; we have to source for the greenback from the interbank
market; even at a high price, it is still scarce. The CBN is rationing
dollars because the external reserves are depleting fast. The central
bank is giving priority to only mature obligations and Letters of
Credit.”
However, the Director of Communications,
CBN, Mr. Ibrahim Mu’azu, said, “The CBN is operating within the limit
and guidelines. Any bank that have issues should inform the CBN
officially.”
But the Head of Corporate
Communications, Skye Bank, Mr. Rasheed Bolarinwa, said the cut in the
international spending limit of its customers was not unconnected to the
scarcity of dollars in the system.
He said, “The cut in international spend
as communicated to the customers is not unconnected to the scarcity of
dollars to settle international transactions. This development is,
however, not peculiar to our bank as other banks have done same,
The Head, e-Banking, Wema Bank, Mr. Dele
Adeyinka, who is also the Vice Chairman, Committee of e-Banking
Industry Heads, confirmed that almost all the banks in the country had
cut their customers’ international spending limits.
He said the development had to do with
the need to avoid settlement and reputational risk on the part of the
banks, adding that the DMBs had been finding it difficult to meet up
with the international card spending habit of their customers.
Visa and MasterCard declined to comment
on the banks’indebtedness, saying the matter was a private affair
between them and the banks.
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