CBN Slashes Spending Limit on Naira Debit Cards to $50,000 Per Annum

The Central Bank of Nigeria (CBN) on Tuesday reviewed downward the spending limit on the usage of the naira denominated debit cards for transactions abroad, from $150,000 per person annually, to $50,000 per person annually.

The daily cash withdrawal limit on the card was also fixed at $300 per person.
 

The central bank stated this in a circular titled: "Usage of Naira Denominated Cards," dated April 13th, that was posted on its website.

The circular signed by the Director, Trade and Exchange Department, CBN, Olakanmi Gbadamosi was addressed to all authorised dealers and members of the public.

The policy became effective from Monday, according to the banking sector regulator.

It explained: "Further to the circular referenced No: TED/FEM/FPC/GEN/01/009 of September 26, 2013, all authorised dealers and the general public are hereby informed that with effect from the date of this circular, the existing limit on the usage of the naira denominated cards for transactions overseas has been reviewed downward.

"Accordingly, the limit has been reduced from $150,000 to $50,000 per person, per annum. In addition, the authorised dealers are to ensure that the daily cash withdrawal limit embedded in the cards per person, per day, is pegged at $300.

"Authorised dealers are to ensure strict compliance with the new limit and render monthly returns of the transactions to the Director, Trade and Exchange Department, CBN, not later than the fifth day of the following month."

The central bank also urged all authorised dealers to ensure strict monitoring and compliance.

The Managing Director/Chief Executive Officer, Union Bank of Nigeria Plc, Mr. Emeka Emuwa, while briefing journalists with some of colleagues in the bankers' committee at the end of their meeting last week, had revealed plans by banks and the CBN, to reduce the limit on the usage of naira debit cards abroad.
 

Emuwa had said the committee took the decision because of some cases of card abuse abroad, which he stressed was also a threat to EXCHANGE RATE stability.

The Union Bank boss had explained: “We did find that in a number of cases people were using the cards in a manner that they were not expected to use them and there have been cases of arbitrage. So in order to sustain stability, what was agreed by the committee was that the limit for the use of the naira debit cards would be reduced.

“As a customer, if you have a dollar account, you will still have unfettered access to it, but for naira debit accounts, the limit would be reduced to a more judicious level.

“This specifically refers to the use of these cards abroad because when they are used abroad, the merchants have to be settled. Even if it is at ATMs, the service provider, Visa or MasterCard, has to be settled in foreign currency and we find that it is a drain on the foreign resources available to FINANCEour industries.

Credit: Thisdaylive