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Home Banking & Finance Exchange Rates CBN cautions banks denying forex to travellers

CBN cautions banks denying forex to travellers

The Central Bank of Nigeria (CBN) has cautioned managing directors of Deposit Money Banks (DMBs) denying travelers and other foreign exchange (forex) users access to dollars that their banks will be punished.

At a meeting with the CBN Governor, Godwin Emefiele, the bank chiefs were  cautioned to desist from denying customers, particularly travelers, the opportunity to purchase foreign exchange for the purposes of Personal Travel Allowance (PTA), Basic Travel Allowance (BTA), tuition fees,  and medical payments as well as Small and Medium Enterprises (SMEs) transactions or for the repatriation of Foreign Direct Investment (FDI) proceeds.

The CBN said it will be raising the amount of foreign exchange allocated to banks to meet the requests of customers, particularly travelers, seeking foreign exchange for travel allowances, payment of tuition and medical fees, among other invisibles.

Based on the CBN guidelines, a company can buy up to $5,000 Business Travel Allowance (BTA) per quarter while an individual is entitled to $4,000 Personal Travel Allowance (PTA) per quarter.

Sources close to the meeting held at the weekend, over the challenge faced by customers in accessing forex from their banks, said the Emefiele warned that the CBN would severely deal with any bank that denied customers the opportunity to purchase foreign exchange for legitimate purposes.

The sources disclosed that the CBN Management frowned at the seeming difficulty customers experienced in accessing foreign exchange through their respective Deposit Money Banks (DMBs), particularly for invisibles such as PTA and requests bordering on tuition and healthcare needs frowned at complaints.

Furthermore, the sources hinted that the CBN may release several hotlines for aggrieved customers to report any banks that fails to sell foreign exchange to them even when they have provided required documentations.

Confirming the discussions at the meeting of bank chiefs, the Acting Director, Corporate Communications Department at the CBN, Osita Nwanisobi said on Sunday, June 6, 2021, that the Bank remained committed to ensuring liquidity in the foreign exchange market to meet genuine and legitimate demands of customers.

According to him, “the CBN agreed to increase the amount allocated to banks for travelers, Small and Medium Enterprises among others. The banks also agreed to operate something akin to foreign exchange imprest account such that the coffers of banks will be replenished so long as they retire the initial amounts to the satisfaction of the CBN”.

Nwanisobi said there was no cause for alarm and urged interested members of the public seeking to purchase foreign exchange for PTA, BTA, payment of tuition fees or medical fees to approach their respective banks for that purpose.

“We wish to assure members of the public that the CBN shall continue to monitor market developments and is committed to ensuring an efficient FX market for all legitimate users,” he pledged.

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