Banks
have begun suspending their Automated Teller Machine cards (debit and credit)
from working overseas as dollar scarcity continues to hit the economy badly.
Stanbic
IBTC Bank, Standard Chartered Bank Nigeria and Guaranty Trust Bank on Friday
announced the suspension of their overseas ATM card services.
Also
suspended by the banks are online transactions priced in foreign currencies.
This means that customers of the banks will no longer be able to use their
debit or credit cards to make online transactions that are denominated in
dollars, euros, pounds sterling and other foreign currencies.
In
a note to its customers on Friday entitled: ‘Suspension of international
transactions on naira debit cards’, Standard Chartered Bank Nigeria said,
“Please be informed that effective immediately, your naira denominated debit cards
will no longer be functional for international transactions.
“This
is due to the current volatility in the foreign exchange market. Your
naira-denominated debit cards can only be used for local transactions at Point
of Sale terminals, Automated Teller Machines and online for Nigerian
retailers.”
In
a text message to its customers on Friday, Stanbic IBTC Bank similarly said,
“Dear customer, kindly note that effective October 18, 2016, your ability to
carry out transactions priced in foreign currency using our naira debit and
credit cards will be suspended. We apologise for any inconvenience in this
regard.”
Both
Stanbic IBTC Bank and Standard Chartered Bank Nigeria advised customers seeking
to carry out transactions denominated in foreign exchange to apply for dollar
or pounds sterling debit credit cards. According to them, the dollar or pounds
sterling debit or credit cards will be linked to the customers’ domiciliary
accounts.
GTBank
also announced the suspension of the ATM cash withdrawal service abroad. The
lender also slashed its monthly ATM forex transactions to $100.
In
a notice to customers on Friday entitled: ‘Review of the international spending
limit on your naira Master Card’, the bank stated, “We write to inform you of
the monthly spending limits currently applicable when using your GTBank naira
Master Card for international payments via PoS and online. Previous monthly
limit via PoS and online was $250; the new monthly limit via PoS and online is
now $100. Kindly note that ATM cash withdrawal on your naira MasterCard is now
only available in Nigeria.”
The
development will make students studying in the United Kingdom, United States,
Canada, Ukraine and other parts of the world to face more challenges getting their
monthly stipends from their parents.
Most
of the students had relied on the ATM card withdrawal to get their monthly
stipends from their parents before now.
This
means customers seeking to do foreign transactions will have to open
domiciliary accounts and fund same with dollars, pounds or euros purchased from
the parallel market at the prevailing exchange rates.
Although
other banks have yet to announce the suspension of ATM card services abroad,
findings by our correspondent showed that many lenders had reduced drastically
the amount that customers could withdraw via ATMs abroad.
This
is despite the fact that the banks have in the past few months reduced the
monthly total amount of forex-denominated transactions that customers can do,
using their naira debit or credit cards via ATMs and PoS terminals abroad as
well as online payments or transactions.
As
of last week, findings showed that some banks had slashed their daily ATM
withdrawal limit abroad from the $300 advised by the Central Bank of Nigeria’s
Bankers Committee to $100 due to their inability to source for dollars to fund
the transactions.
Unconfirmed
sources said some banks had reduced their monthly ATM withdrawal limit abroad
to $100.
Top
banking officials close to the development told our correspondent under the
condition of anonymity that banks were increasingly finding it difficult to
fund their foreign-currency denominated services, especially online forex
transactions and overseas ATM withdrawals, as well as PoS usage overseas by
customers.
A
top official of Deposit Money Bank, who spoke on the condition of anonymity,
told our correspondent on Sunday, “We have to stop the services. Formerly, we
were sourcing forex at high prices and we were selling same to customers at
similarly high prices. But the situation is now tense; the dollar scarcity has
assumed a new dimension.
“This
is coupled with the fact that some bank customers are using the platforms to do
round-tripping. It is high time we stopped it.”
The
decision by some banks to suspend overseas ATM card services and online forex
transactions came barely one week after the CBN, through the Bankers’
Committee, raised concerns about what it called the indiscriminate and
suspicious manner in which some bank customers were spending dollars and other
foreign currencies abroad through their naira debit cards.
Consequently,
the regulator said it had concluded that bank customers who spent above the
$50,000 annual forex limit it imposed would be barred from the nation’s forex
market.
The
Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, stated this after the
329th Bankers’ Committee meeting held at the apex bank’s office in Lagos on
Wednesday.
She
said, “In the CBN’s move to manage the demand for forex, there was a rule that
was put in place that people were not allowed to withdraw more than $50,000
annually on their naira debit cards.
“For
a while, the policy has been abused by bank customers, and the CBN has not
taken any step to that effect. We have decided to take the step now to enforce
the rule. So, we want members of the public to remember that that rule is in
place.
“All
your accounts are linked to a particular Bank Verification Number. Now, that
the BVN only allows you to withdraw only $50,000 per annum, if people continue
to breach that rule, they will lose access to forex market.”
Dollar
scarcity has been ravaging the economy after the price of crude oil, Nigeria’s
main forex earner.
It
crashed from $110 per barrel to around $44 per barrel from June 2014.
The
nation’s foreign exchange reserves have been depleting since then.
On
Wednesday, the country’s external reserves hit an 11-year low of $24.21bn, the
latest data posted on the CBN website showed.
This
means a limited amount of dollars will be available at the official interbank spot
market, fuelling concerns over another round of depreciation of the naira.
The
foreign exchange reserves fell by $600m in two weeks before shedding $1bn in
four weeks, the CBN statistics showed.
An
expert at Ernst and Young, Mr. Bisi Sanda, lamented on the dollar pressure on
the economy.
He
said the Federal Government needed political will to address the issues
fuelling dollar scarcity on the economy.
He
said, “The issue of dollar is very important to the economy. It is predicated
on the fact that we are a dollar-denominated economy. It appears the government
is still begging issues as far as the import-dependent state of our economy is
concerned.
“We
need to fix issues, we need to go back to the drawing board. The CBN said
between 2010 and 2016, a total of $11bn was sold to the Bureaux De Change
annually. We need to plug leakages in this area.”
Source:The Punch Newspaper
Tags
Business