Stanbic IBTC, Zenith, others impose dollar spending limit on customer’s debit card
As part of measures to curb speculations on the local currency, avoid foreign exchange settlement risk, some banks in the country are adopting measures to reduce the amount of dollar customers can spend abroad using their debit cards.
Apart from the fact that the Central Bank of Nigeria (CBN) has reduced its intervention in the domestic forex market due to dollar shortages, some lenders are also taking measures to limit foreign currency settlement risk by put a limit on customer’s spending while abroad.
The local unit of South Africa’s Standard Bank, Nigeria’s Stanbic IBTC said it will halve the spending limit for offshore card transactions to $500 per month from Monday and will limit cash withdrawals to $100.
Zenith Bank is also adopting similar measures as the lender said it will temporarily suspend the use of debit cards abroad for cash withdrawals and cut the monthly spending limit abroad by more than half to $200.
“This review is in response to today’s economic realities,” Zenith said in a notice, advising clients to request prepaid dollar cards.
Other lenders — Ecobank and Fidelity Bank — have also lowered withdrawal limits for individuals while abroad.
Nigeria is facing dollar shortages because of the sharp fall in the price of oil, Nigeria’s main export, and domestic banks are trying to avoid transactions with hard currency.
Such moves have previously been at the behest of the central bank, but it was not clear if the regulator was behind the latest action. The central bank did not respond to a request for comment.
The bank is battling to conserve dollar reserves that are down 19 percent from a year ago. Last week it depreciated the currency on the official market prompting the naira to weaken on the black and over-the-counter spot markets.
Nigeria is yet to resume forex sales to retail currency traders after it banned international travel as part of a lockdown measure to slow the spread of the coronavirus that has killed 778 people and infected more than 36,000.