Bank customers are divided over the reduction in the amount of
foreign exchange that can be accessed for overseas transactions through
Naira debit/credit cards.Two weeks ago, the
Central Bank of Nigeria (CBN) reduced the limit on Naira debit card for
overseas transactions to $50,000 per person per annum from $150,000. It
also reduced the limit for daily withdrawal to $300 per day from $1,200
per day. The reduction is on Naira denominated MasterCard or Visa Card,
linked to bank accounts in Nigeria.
A cross section of bank customers who spoke to Financial Vanguard
on the policy were however divided on the necessity and impact of the
policy on the economy. While some criticised the reduction, saying it
would hurt their businesses, others commended the reduction, saying it
would help curb wastage of foreign exchange and corruption.
Criticising the new limit, Mr. Chiedu Igwe, an importer said, “The
idea of reducing the debit card limit to $50,000 per person per annum is
discomforting. I travel out often to get items for my trade and that
aside; 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 like me.
Another businessman, “Mr. Lekan of LakeSide Clothing said, “I am not
comfortable with the reduction, because I travel overseas to purchase
most of what I sell in my stores. I make use of my debit card for
shopping whenever I travel abroad, and I travel more than once in a
year. So this new limit will disrupt my business plans.”
Corroborating these views, Mr. Umaru Hassan, a customer of Diamond
Bank, Apapa, said that the reduction in limit is not good for business
people, as most of them always travel abroad to purchase goods and
conduct other business related activities that involves the use of
money. “The idea of reducing the limit to $50,000 per person, per annum
is an indirect way of reducing their ability to do business”, he said,
adding that the CBN should reverse the policy.
On the contrary, veteran producer, director and actor, Prince Jide
Kosoko commended the reduction, saying it would help curb the outrageous
spending of many Nigerians. 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”.
Similarly, actress Ronke Ojo, commended the reduction saying it is
another means of eradicating corruption. “It is obvious that electronic
banking has generated some hiccups in the economy. However, the policy
is a means to curb our excesses and eradicate corruption in the
country,” she said.
According to Mr. Harrison Owoh, Chief Executive Officer, H.J Trust
Bureau De Change, “The reduction in limit would minimise the various
abuses associated with the use of Naira debit card overseas, like round
tripping. He noted that some people use the card to withdraw dollars
abroad at cheaper exchange rate, and then import the dollars and
exchange them at higher exchange rate.
Banks commence implementation
Meanwhile, banks have commenced implementation of the reduction in
limit on Naira debit card for overseas transactions by informing their
customers about the new limits
For example, GTBank in an email message to its customers said, “We
write to inform you of the Central Bank of Nigeria’s (CBN) decision to
reduce the Foreign exchange spending limit on Naira MasterCard from
$150,000 to $50,000 per annum.
This means that you can spend up to $50,000 in a year using your
GTBank Naira MasterCard when abroad (shopping online at foreign stores,
ATMs and POS). In addition, the daily cash withdrawal limit for the
Naira MasterCard has also been reduced to $300 per day. Please see below
the new limits for both spending using your Naira MasterCard and cash
withdrawal abroad”.
Similarly, First City Monument Bank (FCMB), informed its customers
via an email message saying, “Dear Customer, the new foreign exchange
spending limits on your FCMB card is shown below. This means that when
you are abroad, you can only spend up to $50,000 or its equivalent
annually (shopping online at foreign stores, ATMs and POS). In addition,
the daily cash withdrawal limit for FCMB cards have also been reduced
to $300 or its equivalent per day.”
Limit not applicable to Domiciliary Accounts
Meanwhile, there are indications that the reduction in limit is being
misinterpreted to include use of Naira debit cards for local
transactions and, also debit cards linked to Domiciliary accounts.
Indications to this effect emerged from a circular issued by the CBN,
Director of Trade and Exchange Department, Mr. Olalekan Gbadamosi. The
circular titled, “Clarification on Circular of April 13, 2015. Re: Usage
of Naira Denominated Cards Overseas, stated, “It has been observed that
some sections of the public are giving different interpretations to the
recent circular on the usage of Naira debit denominated debit cards
overseas. It has therefore become necessary to provide the following
clarifications:
For the avoidance of doubt, the circular refers to naira denominated
cards (debit and credit) to be used overseas only. Debit/Credit cards
used locally are not affected by this circular. Debit/Credit cards
linked to customers’ Domiciliary Account to be used overseas are not
also affected. Authorised dealers are to take note and bring this to the
attention of their respective customers.”
