Deposit Money Banks in the country are
recording unprecedented foreign exchange bills owing to heavy and
frequent use of payment cards by their customers who travel abroad, it
has been learnt.
The development, which has created huge
forex debts with the banks’ international financial partners, has forced
many DMBs to stop their customers from using their Automatic Teller
Machine cards abroad, top bank executives told our correspondent on
Sunday.
The top bankers, who spoke on condition
of anonymity because of the sensitive nature of the matter, listed the
countries mostly affected by the measure as China, United Arab Emirates
and all African countries.
One of the bankers explained, “We
stopped customers from using their payment cards when they travel abroad
because a large number of them have created settlement problems for us.
We have huge bills to pay in forex because many of the customers who
are traders and importers are using multiple ATM cards to incur heavy
forex liability for us in China and Dubai and some African countries.
“Also, some customers are engaging in
round-tripping. They go to some of these countries, especially
neighbouring countries in Africa, and use their ATM cards to create
heavy forex liabilities for us. We just have to stop it; it is too
much,” one of the bankers explained.
Diamond Bank, in a notice to its customers, blamed the current foreign exchange problems as the reason.
“Due to the current FX market realities,
please be informed that your naira debit card has been restricted from
usage in the UAE, China and African countries. We encourage you to make
use of the Diamond USD or Diamond GBP debit card to transact in any of
the above-mentioned countries,” Diamond Bank said in a notice to its
customers.
As a result of the development, economic
and financial experts have advised the CBN to look at the possibility
of devaluing the naira as a way out of the problem.
Renowned economist and Managing
Director, Financial Derivatives Limited, Mr. Bismarck Rewane, said, “The
move by the banks are obvious signs of rationing and restriction by the
CBN. I am not surprised. The solution is to let the exchange rate
change.
“How long can we hold it? The forex is
not there; so, the only thing is to allow the exchange rate to go. I
think a combination of devaluation of the naira and some restriction
will save us from the situation.”
The Head, Investment and Research,
Afrinvest West Africa, Mr. Ayodeji Ebo, said the forex scarcity was
caused by the administrative controls and restrictions by the CBN.
He said, “This measure and others will
only compound our problem. The CBN needs to know that we don’t have
sufficient reserves to keep holding the currency; the way out is to
allow the naira to flow in order to reduce the dollar scarcity. If you
devalue the naira, the scarcity will reduce.”
On his part, the Managing Director,
Economics Associates, Dr. Ayo Teriba, said the move by the banks would
weaken confidence of wealth holders, and advised the fiscal and monetary
authorities to come up with plans to address the problem.
He said, “This is not a positive signal
for us who are trying to attract and retain savings. If people are
trapped overseas because they can’t use their cards, they will think
twice in the future whether they should keep their money in Nigerian
banks or outside the country.
“This is because when the rule of the game changes suddenly like this and people become stranded, they will think twice.
