…suspend ATM cash withdrawal
A number of Deposit Money Banks (DMBs) in the country are imposing fresh limits on the amount individuals can withdraw with their debit cards while abroad, New Telegraph has learnt.
For instance, apart from reviewing the amount its clients can withdraw with their debit cards while overseas, downwards, top tier lender, Zenith Bank, said yesterday that it has temporarily suspended the use of its naira cards for international Automated Teller Machine (ATM) cash withdrawals.
An email that Zenith Bank sent to its customers, which was sighted by New Telegraph, reads in part: “Please be informed that we have temporarily suspended the use of Zenith Bank naira cards for international Automated Teller Machine cash withdrawals and reviewed the monthly card international spend limit from $500 to $200.
This review is in response to today’s economic realities.
“If you have higher international spend requirements, visit any of our branches and request for a foreign currency debit or prepaid card, which are available in US Dollar, Pounds and Euro variants.”
The lender had, a fortnight ago, informed clients that the daily cash withdrawal limit on ATMs outside Nigeria, had been reviewed to $100, stating, however, that the service was not available in Benin Republic, Niger Republic, Togo and Ghana.
In addition, it said then that the monthly international spending limit for using its naira card had been reduced to $500.
Zenith Bank was among several lenders which, in late March, lowered withdrawal limits for individuals while abroad. Specifically, at the time, Zenith Bank reduced international spending limits on its naira-denominated cards to $1,000 from $3,000.
It also set daily limits for withdrawals outside Nigeria at $300. Another top tier lender, Guaranty Trust Bank, also announced then that the monthly spending limit on its GTB Naira Mastercard had been reviewed to $500 for international transactions.
Similarly, second Tier lender, Fidelity Bank, imposed a new limit of $1,000 from April 1, down from $3,000 previously. New Telegraph gathered at the weekend that many of the lenders, which in March and April, announced new limits on the amount individuals can withdraw with their debit cards while abroad, are planning to further review the amounts downwards beginning from today.
Analysts attribute the development to the lingering scarcity of foreign exchange in the system occasioned by the oil slump. According to industry sources, it now takes more than six months to settle foreign lines of credit.
The sharp drop in the price of oil – the commodity that accounts for about 90 per cent of Nigeria’s exports – coupled with the impact of the coronavirus pandemic, has resulted in the country’s external reserves falling by 19 per cent, from a year ago, thereby forcing the Central Bank of Nigeria (CBN) to take measures to curb forex demand and conserve the reserves.
Indeed, while the CBN is yet to resume forex sales to Bureaux De Change (BDCs), which were stopped after the Federal Government banned international and local travel as part of lockdown measures to slow the spread of the coronavirus, analysts at Financial Derivatives Company (FDC) have predicted that: “The depletion rate of the reserves level is expected to intensify, especially as domestic and possibly international flights resume.”
In the wake of the drop in the external reserves, the naira has been steadily weakening against the dollar (falling to N470 per dollar) and other international currencies, especially on the parallel market. Analysts said the naira’s loss of value is due to trad