BANKS based in Nigeria have suspended the use of their Automated Teller Machine (ATM) cards (debit and credit) outside the country.
Bank customers, as of Friday, are also no longer able to conduct online transactions priced in foreign currencies, including US dollars, euros, and the British pound.
Customers of Nigerian banks, including Zenith Bank, Stanbic IBTC Bank, Standard Chartered Bank Nigeria and Guaranty Trust Bank received the bad news on Thursday.
Customers learned their international transaction limits were being reduced to as low as 20 dollars for certain banks, the lowest in several years.
In a note to its customers, Standard Chartered Bank Nigeria said the action was ‘due to the current volatility in the foreign exchange market.’
Nigeria is also dealing with a severe shortage of foreign currency, particularly US dollars.
Nigeria’s foreign reserves were down by 1.60 percent between December 2021, ($40.52bn) to March 2, 2022 ($39.87bn).
The development will make Nigerian students in the United Kingdom, United States, Canada, Ukraine and other parts of the world face more challenges getting their monthly stipends from their parents.
Most of the students rely on ATM card withdrawals to get their monthly stipends from their parents before now.
This means customers seeking to do foreign transactions will have to open and fund domiciliary accounts with dollars, pounds or euros purchased from the parallel market at the prevailing exchange rates.
The decision to suspend overseas use of Nigerian bank ATM cards comes following concerns expressed by the Central Bank of Nigeria (CBN) about the indiscriminate and suspicious manner in which some bank customers were spending dollars and other foreign currencies abroad through their naira debit cards.
CBN Banking Supervision Director Tokunbo Martins said in an effort to manage the demand for forex, a rule barring people from withdrawing more than $50,000 annually on their naira debit cards was put in place. But the CBN found that many customers abused the policy and withdrew more. She says the steps taken on Friday are designed to remind customers of the $50,000 limit.
Banking sources said 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.
The CBN says anyone spending or withdrawing over the $50,000 annual forex limit it imposed would be barred from using the forex market.