Scores of customers of Nigerian banks were jolted on Thursday over notices from their banks announcing the restriction of their international transaction limit to as low as 20 dollar and 50 dollar, being the lowest in several years.
The daily international withdrawal limit has been around $100 for most banks until yesterday, Daily Trust observed.
Banks had in 2020 stopped the use of naira cards for ATM foreign currency withdrawals while reviewing monthly international spending using naira cards from $500 to $300 and ultimately to $100.
Nigeria’s foreign reserves were down by 1.60 per cent between December 2021, ($40.52 billion) to March 2, 2022 ($39.87bn).
In the latest development however, Zenith Bank and First Bank cut international spending using naira cards from $100 monthly to $20 and $50 respectively.
Zenith Bank in a note titled “Temporary Suspension of International ATM Withdrawals/POS Payments and Review of Web Transactions Limit Using Zenith Bank Cards” to its customers, said it is reviewing naira card spending on web transactions from $100 to $20.
It also suspended the usage of its naira card for cash withdrawals on International Automated Teller Machine (ATM) and Point of Sales (PoS) transactions, noting that its latest management decision was due to economic reality.
First Bank noted that “Your monthly international limit on your naira card has been reduced to $50. For a higher limit, get a Visa Debit Multi-currency card at the nearest branch.”
Global forex in turbulence – Experts
Financial experts have opined that the recent moves by commercial banks to review the international limit on naira cards is an indication of the crisis in the foreign exchange market.
A financial market analyst, Abiola Rasaq, who said the move is not peculiar to the two banks, added that the decision is because the banks can no longer fund the foreign currency debits arising from the use of naira-denominated cards for forex transactions, especially as the autonomous sources of foreign currency have significantly dried up.
A former Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, said by the move, the Central Bank of Nigeria (CBN) is seeking to fix the dysfunctional forex market by rationalising demand.
“It is an indication of the crisis we have in the foreign exchange market. The CBN is looking for ways to manage the liquidity,” he said.
Meanwhile, this is coming at a time when banks in the United States of America, announced an increase in their same-day Automated Clearing House (ACH) payment.
The National Automated Clearing House Association (NACHA)—which manages the ACH payment system—increased the transaction limit for same-day ACH to $1 million, up from $100,000, effective from March 18.
NACHA, in a publication, said the $1 million limit will be beneficial for many types of payments, from insurance claim payments and payroll funding to business-to-business and tax payments, and many more.