The Central Bank of Nigeria is reportedly preparing measures to stop commercial banks from restricting customers’ access to foreign currency held in domiciliary accounts following complaints about difficulties withdrawing funds. The apex bank is expected to require banks to honour legitimate withdrawal requests and dispense foreign currencies to customers who meet the applicable requirements for operating their accounts. DownloadInteractive Maps
The development follows complaints that some banks have introduced limits or other restrictions on foreign currency cash withdrawals, particularly in US dollars and British pounds. Checks at several banks in Lagos reportedly showed that the practice varies between institutions. While some banks impose limits on the amount customers can withdraw per transaction, others tell customers that foreign currency notes are unavailable.
Some banks were also reported to be offering only lower denominations, including $20 notes, a practice customers alleged was intended to discourage them from proceeding with withdrawals. One banking source alleged that the practice allowed banks to appear compliant with CBN regulations while making it difficult for customers to access their foreign currency deposits.
At one old-generation bank, a teller reportedly told a customer seeking to withdraw $5,000 that only $3,000 could be provided. The teller also expressed uncertainty over whether the customer would be able to withdraw another $3,000 if he returned the following day.
At another commercial bank, a teller reportedly said US dollars were unavailable and advised the customer to continue checking for availability. However, another customer at the same bank alleged that foreign currency was being reserved for selected customers, claiming that a friend had withdrawn $4,000 from the branch earlier that day.
At a new-generation bank on Victoria Island, Lagos, a teller reportedly said US dollars were unavailable, while another customer said he had just withdrawn $1,000. The customer claimed that $1,000 was the maximum amount being dispensed over the counter because of a shortage of the currency.
A source close to the CBN said the regulator was aware of the complaints and was considering measures to address what the source described as an illegal practice by some banks. “The Central Bank of Nigeria has received several complaints from the general public alleging difficulties in withdrawing cash from their domiciliary accounts, even when withdrawals are made in accordance with the applicable requirements for the operation of their accounts,” the source said. DownloadInteractive Maps
“These complaints include reports of practices and arrangements that may impede the timely and convenient fulfilment of legitimate withdrawal requests.” The source said an investigation was underway and indicated that the CBN could soon issue a circular directing banks to stop practices that unnecessarily restrict or delay legitimate foreign currency cash withdrawals.
Banks are also expected to be directed to review their procedures and take immediate steps to ensure that legitimate withdrawal requests are appropriately honoured. Some banking sources further alleged that certain banks could be using foreign currency cash deposited by customers for trading activities instead of making the funds readily available for withdrawal, allowing them to generate additional earnings.
The allegation has not been independently established. The reported restrictions have raised concerns among domiciliary account holders who expect reasonable access to their foreign currency deposits when withdrawal requests comply with applicable banking requirements.