Finance

CBN increases forex allocation to banks

Only CBN can direct us on old Naira notes — Banks

The Central Bank of Nigeria (CBN) has concluded plans to increase the amount of foreign exchange allocated to banks to meet the requests of customers, particularly travellers seeking foreign exchange for travel allowances, payment of tuition and medical fees, among other invisibles. 

This followed the stern warning issued by the CBN Governor, Mr Godwin Emefiele, at a meeting with the Managing Directors of Deposit Money Banks (DMBs) cautioning them to desist from denying customers, particularly travellers, 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. 

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Sources close to the meeting held at the weekend, over the challenge faced by customers in accessing forex from their banks, said the Governor 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. 

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

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. 

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According to him, “the CBN agreed to increase the amount allocated to banks for travellers, 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”. 

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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.

Last week was one of twists and turns for First Bank of Nigeria Limited, the nation’s oldest banking institution. It was a week that saw the bank’s MD sacked and reinstated, as major shareholders struggled for control of the financial powerhouse.

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