Pandemonium as Nigerian Banks Limit International POS/ATM Transactions to $300 Per Day

Guaranty Trust Bank

Guaranty Trust Bank, Africa’s leading bank and best Bank in Nigeria 2014 in a mail on Sunday to its customers, announced a review of International Spending Limits on its flagship Naira MasterCard.

The mail which came as a shocker to the bank’s customers early Sunday morning, stated:

“…in view of the increased difficulty in sourcing foreign currency to settle international transactions on Naira MasterCards, we have reduced the daily international spending limit on your Naira MasterCard to $300.This means that you can only spend up to $300 daily when using your GTBank Naira MasterCard for international payments via POS and online.”

“You will, however continue to have the option of paying for medical bills, school fees, mortgages and credit cards using Form A, as these are eligible transactions for foreign currency. Simply visit any GTBank branch to complete a Form A along with the required documents to make these payments.”

“Kindly accept our sincere apologies for every inconvenience this might cause, and we would like to assure you that we are working hard at finding alternative sources for foreign currency and a quick respite to this situation.”

Nigeria’s Apex Bank, the Central Bank of Nigeria (CBN) had on Thursday, issued an official directive in a circular addressed to all authorised dealers and the general public. The apex bank tagged the directive on the need to halt the depreciation of the naira and consequently discourage speculation.

Prior to the CBN circular, banks in the country had already began rejecting foreign currency deposits from their domiciliary account holders. This action stirred up massive condemnation from importers, businessmen and even everyday Nigerians were not left out.

However, while Nigerians were yet to come to terms with the inconveniences caused by the new policy, banks in the country had this weekend already begun sending emails to its customers on another new policy being implemented. This time being the restriction of international card transactions via ATMs or POS machines to $300 (£193) per day.

Circular from Guaranty Trust Bank to its Customers Sunday Morning

This new policy spurred massive condemnation from Nigerians at home and abroad on social media Sunday morning.

Mr. Abba, a Nigerian based in South Africa was furious, he lambasted the rational behind the new policy saying “…It’s alarming. In a nutshell Nigerians abroad are officially handicapped! I don’t know where these phoney new policies are coming from and what they intend to achieve.” He went further, “In Istanbul the Atms only have 50$ notes, so meaning we can only withdraw 250$ per day and get charged 420 Naira per withdrawal. I thought our banks were meant to make our lives easier not complicated. Definitely we have to resort to carrying huge sums of cash on us when we travel from now on”.

Mr. Kay, a UK based Nigerian adding his voice to the outrage on social media, said; “I got mine yesterday and the whole thing left me in shock. It’s 1985 once again”.

Another Nigerian, Mr. Shaaya was more accommodating of the policy, in his words; “We just have to bear with them for the time being. Its a necessary policy as a result of the dollarization of the economy during the election period all thanks to the previous Oga at the top but the policy will be reversed much later”.

Ms Abby, a UK based female and fashion designer was brief in he comment, she said; “I was speechless at the email myself”.

A source from one of Nigeria’s leading banks with deeper understanding of the issue was more accommodating and offered some explanations. He hinged the new policy as a war on money laundering and corruption. In his words;

“So many politicians stored up stolen funds in dollars and Nigerians investing in FX deals pushing down the value of the naira. Corporate account owners using their corporate cards to withdraw thousands of dollars in america as a means of moving stolen funds. The Nigerian government have to pay for all this from our foreign reserve thereby depleting it for the selfish benefits of a few thus holding Nigerians to ransom. The CBN had to step in, telling all banks to reduce spending limits to $300 a day. Hence to protect the nigerian economy, our currency and to frustrate the actions of corrupt Nigerians.

However, he also showed concern for genuine businesses and individuals who were affected by virtue of this policy.

“The only problem with these recent policies rolled out by the CBN is our business men and women out there who have not been able to pay their supplier’s around the world due to the inability of the CBN to provide forex for LC’s and Form M. This too affects the economy and gives nigeria a bad image especially with our Chinese partners.”

While most Nigerians are yet to be aware of this new policy, a second of its kind within a week, more condemnation is expected when offices and individuals open for business come Monday morning.

Mr. Eta (@royaltyuso) writes in from Abuja.