Amid the worsening scarcity of foreign exchange in the financial market, there are indications that more banks in the country may soon emulate Standard Chartered Bank and completely stop the international usage of naira debit and credit cards by their customers.
Standard Chartered Bank had, in an email to its customers, stated that with effect from January 1, 2016, it would no longer enable their naira debit and credit cards for international use.
The lender attributed the move to the limited foreign exchange supply in the market, adding that it was a temporary measure until market forex liquidity is restored.
The Standard Chartered Bank’s announcement came on the heels of reports that the Central Bank of Nigeria (CBN) had, at a meeting last Friday, advised banks to limit usage of cards abroad by their customers based on their individual reserves and capacity to secure dollars, especially for those without foreign affiliates.
Following the decline in the foreign reserves occasioned by the oil price slump, the apex bank had, in April, cut the amount individuals could spend abroad with their naira cards to $50,000 from a limit of $150,000 per annum.
However, since the Friday meeting with the regulator, several Deposit Money Banks (DMBs) have written to their customers either further reducing the amount individuals can spend abroad using their naira cards, or imposing restrictions on such usage.
Last week, Wema Bank and Skye Bank sent emails to their customers stating that they had cut the amount individuals could spend abroad to $12,000 annually.
Similarly, in an email to its customers at the weekend, Keystone Bank announced that it had imposed restrictions on the usage of Mastercard (naira debit card) for cash withdrawals in African countries and China. It, however, stated that Point of Sale (PoS) transactions would still be allowed anywhere in the world including African countries and China.
The bank also said customers were required to inform it before usage of the debit card overseas.
Significantly, in advising customers that international transactions on all naira denominated cards will now have a monthly transaction limit of $1,000, Zenith Bank also stated that customers requiring transaction spend above the limit should obtain a dollar debit card by opening an individual domiciliary account funded by electronic transfer.
A bank executive, who did not want to be named, said that the scarcity of forex in the financial market was beginning to take its toll on banks as many lenders were no longer keen on opening Letters of Credit (LCs) for their customers.
The source predicted that many banks were likely to tow the path of Standard Chartered Bank in the coming days and stop the international usage of naira card.
He said: “Most banks will soon stop their customers from international usage of naira cards. This is because you can’t keep providing for what you don’t have.
“The problem is that there is no dollar in the system at the moment except in the black market. We spend $2 million to $3 million every month settling naira card bills. Where are we expected to be getting the dollars from since the CBN banned us from accepting dollar cash deposits?”
The bank executive explained that whenever a customer travelled out of the country and paid for purchases in dollars using the naira card, the customer’s bank in Nigeria would have to source the dollars to settle the obligations to the overseas’ merchant.
He revealed that the forex scarcity was responsible for the lingering fuel crisis in the country, pointing out that many banks were no longer guaranteeing LCs.
The continued decline in oil prices has impacted the CBN’s ability to defend the naira. The naira plunged to 274 to 280 to the dollar on the parallel market after the CBN cut dollar supplies to Bureaux De Change (BDCs).
Last Wednesday, the apex bank cut the amount of dollars it sold to each of the 2,270 BDCs that participated in the forex sale to $10,000 down from the $30,000 sold weekly.
Quoting an unnamed source, the British Broadcasting Corporation (BBC) reported on Monday that the CBN had banned the use of credit card overseas.
Meanwhile, travellers and aviation experts have expressed divergent views on the restrictions on the use of naira card overseas.
Managing Director of IRS Airlines, Mr. Yemi Dada, said that the restrictions were in order because government was trying to strengthen the naira and protect the national reserves.
He said: “CBN has brought up the policy to redeem the value of the naira. I know this will not go well with some Nigerians, but the CBN has the power to do it.
“Many Nigerians travel abroad and spend their annual savings within one month in the name of holidays.”
But criticising the new limit, a former Assistant Secretary General, Airline Operators of Nigeria (AON), Alhaji Mohammed Tukur, described the policy as discomforting.
He said: “I travel out often to get items for my trade. Besides, I spend money on vacations using a naira debit card.
“So, with this new limit on debit card, how am I going to keep up with my business and personal foreign exchange needs while I am overseas? I wish the implementation of the policy could be re-adjusted if possible to help businessmen.”
https://www.today.ng/business/56550/more-banks-to-end-usage-of-naira-creditdebit-card-abroad

285 per dollar no be beans



At a Give away price, Get your Timberland Boot , Nike,Emporio Armani,visit link at signature below

uk citezenship things on my mind

God will help us