The Central Bank of Nigeria is reportedly investigating complaints that some commercial banks are restricting customers from withdrawing foreign currency from their domiciliary accounts, with the apex bank expected to direct lenders to honour legitimate withdrawal requests without unnecessary delays.
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The development follows a growing number of complaints from customers who say they have been unable to access dollars, pounds and other foreign currencies deposited in their accounts despite complying with applicable banking requirements.
According to Financial Vanguard, a source close to the CBN said the apex bank had received several complaints alleging difficulties in withdrawing cash from domiciliary accounts and was already putting measures together to address the practice.
“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.
The source added that the complaints included practices and arrangements that may impede the timely and convenient fulfilment of legitimate withdrawal requests.
The CBN is consequently expected to issue a circular advising banks to desist from practices that unnecessarily restrict or delay legitimate foreign-currency withdrawals, particularly where customers have complied with the requirements governing their accounts.
According to the source, banks would also be directed to review their existing practices and take immediate steps to ensure that legitimate withdrawal requests are appropriately honoured.
The source described some of the restrictions being imposed by banks as improper and said the apex bank would frown at the withholding of customers’ foreign currency.
The reported intervention follows complaints that banks have adopted different approaches to limiting access to foreign currency deposits.
Some customers said banks imposed ceilings on how much they could withdraw over the counter, while others were told that dollars or British pounds were unavailable.
In some cases, banks reportedly offered customers only lower-denomination dollar notes, including $20 bills.
Some affected customers alleged that the practice was designed to discourage them from completing their withdrawal requests while enabling the banks to maintain that foreign currency had technically been made available.
At one old-generation bank, a customer seeking to withdraw $5,000 was reportedly informed that only $3,000 could be dispensed.
The teller was also said to have indicated that there was no guarantee that the customer would be able to withdraw even that amount if he returned the following day.
At another commercial bank, a teller reportedly told a customer that US dollars were unavailable and advised the customer to continue checking with the bank.
Other customers, however, claimed they had seen preferred or other customers obtain higher amounts on the same day.
At a new-generation bank on Victoria Island, Lagos, a customer reportedly said he had received $1,000 after another customer was informed that dollars were unavailable.
The customer said the bank had placed a $1,000 maximum on over-the-counter dollar withdrawals, attributing the restriction to a shortage of physical foreign currency.
The different experiences have raised questions over whether the restrictions are driven solely by cash availability or by internal policies adopted by individual banks.
The report further cited banking sources who alleged that some financial institutions might be using available foreign-currency cash for other transactions instead of making the funds immediately available to domiciliary-account holders.
Those allegations have not been established by the CBN, and the report did not identify banks that had been found by the regulator to have engaged in such conduct.
The source close to the apex bank nevertheless said the CBN was concerned that some practices could create an impression of distress within the banking system if customers were unable to obtain funds standing to the credit of their accounts.
The proposed intervention would therefore require commercial banks to ensure that customers who make legitimate withdrawal requests in accordance with applicable requirements are able to access their foreign currency without arbitrary limits or avoidable delays.
As of the report reviewed, the CBN had not yet published the anticipated circular on its official website. The investigation and proposed directives were reported through a source close to the apex bank.
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