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.
The Director, Monetary Policy Department, CBN, Mr. Moses Tule, who said these in Abuja while speaking with journalists, explained that the restriction 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 current be experiencing challenges meeting the overseas demand of their customers.
This, he added, would have caused huge liabilities in the balance sheet of the banks, thus affecting their operations.
Tule said much as the CBN sympathised with Nigerians for the sufferings they were 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.”
He said, going forward, the priority of the CBN would be to use the foreign exchange to settle matured Letters of Credit that had been opened for importation of petroleum products and other raw materials.
“Given the level of current flow into the reserves, by the time we meet these priority areas, you will discover that people who are using their debit cards overseas for shopping can never be on the priority list,” he added.
On the devaluation of the naira, Tule said President Muhammadu Buhari had, using the budget, given a policy direction on what the CBN should do, adding that “hard choices” would be taken next year by the bank.
He, however, failed to provide details of what he meant by hard choices.
He said, “If you read the budget speech of the President, there was one sentence there where he said we must make hard choices in 2016. The budget is designed to open the growth potential of the economy and the President has said we must make hard choices.
“As policymakers, we are going to make those hard choices so at the right time, the CBN will take the appropriate decisions that will strengthen the foreign exchange market.” Click to signup for FREE news updates, latest information and hottest gists everyday
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Which way,Nigeria?
ReplyDeleteShame on those devils that created all these hardships on Innocent Nigerians.
ReplyDeleteThose useless so called elites dragged the country into importing refined fuels into the country. The thieves has created unnecessary hardships for even innocent private students abroad.
Disgraceful enough, our policy makers never put these innocent yooyoungsters' cases into consideration.
I personally support the cancellation of debit/credit card facilities overseas for obvious reason!. There is no way the CBN can control the use of these cards overseas. Nigerians are noted for taking advantage of loopholes to their advantage. I will not be surprised if Nigerians would not use the cards for money laundering! Million of dollars could exchange through these cards unnoticed by the CBN and the commercial banks. If our foreign exchange had improved considerably, the CBN may decide to allow some changes in its policy but certainly not now. In passing, Nigerians must learn to adjust where reasonable changes are in place to improve the economy.
ReplyDeleteThis is a decision that is both wicked and unproductive. How do you expect Nigerian students to survive abroad with this type of policy all in the name of wrong appraisal of economic priorities?
ReplyDeleteThat is if we have responsible and honest people to manage the CBN. Where were these CBN officials when the looters the country's reserve?
ReplyDeleteI fail to understand why Nigerian students abroad need a Nigerian debit card when funds can be transferred between countries, further more, there are banks abroad where accounts can be opened. So why exactly are they displaying placards at the Nigerian Embassy???
ReplyDelete