Thursday, August 13,2020
Nigerian banks are coming under pressure as forex scarcity in the country worsens, coming up with new policies to reduce international spending limits for their customers.
On Wednesday, a top financial institution, Guaranty Trust Bank (GTBank) Plc, sent an SMS to its customers that it was slashing the international spending limit on its Naira Mastercard by 80 per cent to $100 per month from $500 it first reduced it to in March 2020.
In the message seen by Business Post, the tier-one lender said, “Dear customer, the monthly spending limit on your GTBank Naira Mastercard is now $100 for international transactions. Thank you for banking with us.”
The implication of this new development is that for now, customers cannot make payment for foreign purchases or transactions in Nigeria above $100 per month, which is less than N50,000 when converted to the Naira equivalent.
As of 2018, the spending limit on the bank’s Mastercard stood at $3,000 per month and this was when Dollar inflows into the country were fair, but within two years, things have gone worse for the country.
Since the beginning of the outbreak of COVID-19 in 2020, Nigeria has struggled to earn FX, especially from the sale of crude oil and this has put huge pressure on the local currency.
For two different times this year, the Central Bank of Nigeria (CBN) has had to adjust the value of the Naira to the Dollar this year first from N306 to N360 and then to N380.
Also, the regular weekly sale of forex to Bureaux De Change (BDC) operators has not resumed since it was suspended in March 2020 in the heat of the Coronavirus pandemic.
A historical analysis of the spending limit policy of GTBank showed that on March 25, 2020, the lender reviewed it to $1,500 from $3000.
“We would like to inform you that the monthly spending limit on your GTBank Naira Mastercard has been reviewed from $3,000 to $1,500 for your international online and POS transactions effective March 25, 2020,” the bank had said in a message to its customers.
However, as shocks from plunging crude prices gripped the country, reducing its dollar inflows, the lender once again reduced its international spending limit from $1,500 per month to $500 per month in the same March.
And now, less than six months later, it has been reduced to $100 per month.
Projections show that GTBank is not only the lender susceptible to make the change as more banks are expected to follow in coming days as evident in the past.
Just last month, Stanbic IBTC Bank said its customers will only be able to spend $500 per month in terms of offshore card transactions and placed a monthly limit of $100 on withdrawals.
Similarly, Zenith Bank Plc announced a temporary suspension of the use of debit cards for cash withdrawals abroad while it slashed the monthly sending limit for international card users to $200.
There are speculations that First Bank, Ecobank Nigeria, Fidelity Bank, UBA, Access Bank and others will soon adopt the same policy to reduce their monthly cash withdrawals for their customers when using their cards for offshore transactions.
Affected Nigerians across the social media platforms have made their displeasure known about this new development.
In July 2020, the central bank, as part of its efforts to support the Naira, placed an outright ban on the sale of forex to maize importers.
We gathered that as at Tuesday, August 11, 2020, the amount left in the country’s external reserves stood at $35.6 billion.