- Advertisement -spot_img
34.3 C
HomeTop NewsFirst Bank, UBA, Zenith restrict access to dollars via naira debit card

First Bank, UBA, Zenith restrict access to dollars via naira debit card

- Advertisement -spot_img

Nigerian lenders cut the dollar spending limits on local currency cards to free more resources to fund imports after the central bank signaled it will stop foreign-exchange sales to banks.   United Bank for Africa Plc stopped the use of naira card to withdraw dollars from automated teller machines outside the country or make international payments at point of sale devices.

Zenith Bank Plc said it “temporarily suspended” the same transactions on ATM and POS devices. It cut spending limit on web transactions using naira cards to $20 a month from $100, citing “today’s economic realities” in a note to customers.

First Bank of Nigeria Ltd. set the limits on its naira Mastercard and naira credit card to $50 monthly.  UBA’s plan is to cut down on those transactions that would require it to start looking for foreign-exchange, Chiugo Ndubisi, executive director said at an investor call in Lagos.

“We want to encourage as much as possible situations where customers are able to access dollars that they have deposited in banks through their domiciliary accounts,” Ndubisi said. 

A spokesman for Zenith Bank didn’t pick calls or reply text messages seeking comment.

READ ALSO: Nigeria says no more subsidy on electricity tariff, to eliminate fuel subsidy soon

The Central Bank of Nigeria said last month it will stop selling foreign currency to lenders by the end of the year to encourage them to source their own dollars and also support government’s target to lure $200 billion of inflows yearly by 2025.

The regulator has struggled to fulfill its dollar obligations to portfolio investors since 2020 after oil prices collapsed. The International Monetary Fund (IMF) estimates that the central bank has a backlog of $1.7 billion in unmet demand to investors.

While oil exports account for about 90 percent of foreign-exchange earnings, higher prices have failed to boost foreign reserves for Africa’s largest crude producer due to lower than normal output even as part of the export barrels go to fund gasoline imports for local consumption at subsidized prices.

Lenders have to prioritize the use of their dollar balances to drive initiatives that grow such balances going forward, Adesoji Solanke, director for frontier and sub-Saharan African banks and fintech at Renaissance Capital, said by phone.

“Banks tend to limit the amount that Nigerian customers can transact with their naira cards overseas whenever there is increased risk of dollar shortages domestically.”

In order to boost dollar receipts, UBA is looking to attract more export clients by supporting them with funding, according to Ndubisi. “Whenever their foreign currency proceeds are received it comes through UBA and we are able to utilize those needed foreign currencies to meet the yearnings of importers,” he said. ~Bloomberg





Join Our Mailing List!

* indicates required
- Advertisement -spot_img
- Advertisement -spot_img
Must Read
Related News
- Advertisement -spot_img