The Central Bank of Nigeria (CBN) is investigating complaints over restrictions allegedly imposed by some banks on customers seeking to withdraw foreign currency from their domiciliary accounts.
Financial Vanguard learnt that the apex bank may intervene on behalf of customers by compelling banks to honour legitimate withdrawal requests from domiciliary accounts and provide foreign currencies as requested by account holders.
Several bank customers told Financial Vanguard that different banks had adopted various measures to impose total or partial restrictions on cash withdrawals from their foreign currency accounts.
A visit by Financial Vanguard to some banks in Lagos confirmed that the practice exists to varying degrees. Similar complaints have also emerged from customers in other parts of the country.
While some banks reportedly impose limits on the amount customers can withdraw per transaction, others say foreign currencies, particularly US dollars and British pounds, are unavailable. Some banks also offer only lower denominations.
A few banks reportedly offer to dispense only lower denominations, such as $20 notes, which some customers said could discourage account holders from proceeding with their withdrawal requests.
At one old-generation bank, a Financial Vanguard correspondent posing as a customer requested $5,000 but was told by a teller that the bank could only dispense $3,000. The teller added that he was not sure the customer would be able to withdraw as much as $3,000 even if he returned the following day.
At another new-generation commercial bank, a teller told the correspondent: “US dollars are not currently available, but you can keep following up. Maybe you will be lucky next time.”
A customer who received a similar response told Financial Vanguard: “I think they are keeping it for some of their special customers. One of my friends told me to come here because he just collected $4,000 today.”
At another new-generation bank on Victoria Island, Lagos, where a teller said US dollars were unavailable, another customer told Financial Vanguard that he had just collected $1,000.
The customer said the maximum amount that could be withdrawn in US dollars over the counter was $1,000, attributing the restriction to the scarcity of the currency.
CBN moves to curb practice
Speaking to Financial Vanguard at the weekend, a source close to the CBN said the apex bank was already aware of the complaints and was putting measures in place to curb what the source described as an illegal practice by some banks.
The source said: “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.
“These complaints include reports of practices and arrangements that may impede the timely and convenient fulfilment of legitimate withdrawal requests.”
The source added: “They know what they are doing. They know that CBN would frown at their illegal withholding of customers’ foreign currency.
“So they will offer the lower denomination that you cannot accept and thereby blame you for the failure of the transaction.”
Circular may be issued soon
Hinting that an investigation was ongoing, the source said the CBN could soon issue a circular advising banks “to desist from practices that unnecessarily restrict or delay legitimate cash withdrawal requests, which create an impression of banking distress.”
The source added that banks would be directed to review their current practices and take immediate steps to ensure that legitimate withdrawal requests were appropriately honoured.
Banks accused of trading with forex cash
Several informed banking sources told Financial Vanguard that some banks might be trading with the foreign currency cash available to them instead of dispensing the funds to customers, thereby generating significant earnings.
The allegation has heightened concerns among customers who operate domiciliary accounts and expect reasonable access to their legitimate foreign currency deposits when they make withdrawal requests in accordance with applicable banking requirements.
