Banking & FinanceBusiness

Nigerian banks suspend foreign cash withdrawals with Naira cards

Nigerian banks have suspended individual withdrawals with local debit cards abroad and toughened limits on online payments, bankers said on Monday

The suspension comes after the central bank last month said it would stop dollar sales to lenders this year.

Commercial banks had been limiting the amount individuals can withdraw with their debit cards while abroad to ease foreign currency settlement risk with the country facing dollar shortages.

The central bank is battling to protect reserves that have dwindled since the coronavirus pandemic triggered a sharp fall in the price of oil, Nigeria’s main export.

The oil price plunge also prompted foreign investors to shed Nigerian assets.

Oil prices have since recovered and soared, but a backlog demand for foreign exchange has dodged currency markets and the naira.

Stanbic Bank said it would cut limits for online purchases and payments by half to $50 from Monday “in response to economic realities” and suspend cash withdrawals. Daily limits were pegged at $300 two years ago.

Other lenders have followed suit. Zenith Bank said it would impose a new monthly limit of $20 for online transactions, down from $100 previously.

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 said last month it would stop commercial banks from sourcing dollars from its reserves in 2022.

A similar ban placed on exchange bureaux in July caused the naira to tumble to record lows on the black market.

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