28 Dec 2015

KINGSLEY IGWE

CBN Insists It Won’t Reverse Restriction On Naira ATM Card Abroad

The Central Bank of Nigeria has said the decision of Deposit Money Banks to place a restriction on the use of Automated Teller Machine cards abroad by bank customers is due to scarcity of foreign exchange.



The apex bank said while it had no powers to reverse the restriction placed by the DMBs on the use of the ATMs abroad, the CBN was in support of the decision as it would assist in reducing the pressure on the naira.

So also did the apex bank in the country said it will now start selling foreign exchange directly to end users.

The Director of Monetary Policy Department of the CBN, Moses Tule, said these in Abuja when he spoke with newsmen.

Tule said the restriction of the usage of ATM cards might continue until the country could increase its foreign exchange earnings.

He said if banks had not taken the decision to restrict the use of the ATM cards abroad, some of them would by now be experiencing challenges meeting the overseas demand of their customers.

He said would have caused huge liabilities in the balance sheet of the banks, thus affecting their operations.

Tule said though the CBN sympathised with Nigerians for the sufferings they are experiencing in carrying out transactions abroad, there was little it could do to reverse the decision of the banks.

He said: “The limitation on the use of debit or credit cards outside the country was not a limitation that was placed by the CBN.

“They were restrictions that Deposit Money Banks placed because they have to settle whatever transactions you make with your debit cards with their corresponding banks in foreign currency.

“And if the banks do not have the foreign currency to do that, then you create a liability problem for them.”

On the solution to the hardship faced by Nigerians carrying out businesses abroad, Tule said: “Our priority as a nation for the allocation or use of foreign exchange is for the settlement of matured Letters of Credit that have been opened for importation, for the importation of petroleum products, until such a time when we have our refineries fully operational and we are not in a position to import fuel again to ensure that the wheels of economic development continue turning and running and for the importation of raw materials.

“By the time we meet these three priority areas, you will discover that people who are using their debit cards overseas for shopping can never be on the priority list.

“We do understand that it may not be all that the demands will be for shopping.

“We have seen that the reserves are not there and what we have we will use essentially for the purposes that will keep the wheels of the economy running.

“We have to produce for export.
“We can’t continue to depend only on the export of crude oil.

“It is a healthy development where Nigerians can no longer use debit cards abroad.
“But it is inconvenient.

“Right now the country is going through very difficult times because of developments in the oil market.

“Foreign exchange under the condition Nigeria has found itself has become a seasonal commodity.

“Seasonal in the sense that it depends on the movement of the price of oil.

“If oil prices are high, then we build reserves.

“If oil prices are low, then we have no reserves and we will be in a crisis situation.

“Does the CBN sympathize with the situation Nigerians find themselves not being able to use their debit cards outside the country?

“Yes the CBN certainly does sympathize with the hardship Nigerians are facing.

“But can the CBN stop it?
“The CBN cannot stop what the banks are doing now and the reason is very obvious.”

KINGSLEY IGWE

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I've even gone so far as to verbalize it specifically, time is too precious to waste on trivial arguments and negativities. I'd rather get on to the more fun and rewarding stuff right away!

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