The Central Bank of Nigeria (CBN) is preparing measures to compel commercial banks to honour legitimate foreign currency withdrawal requests from domiciliary account holders, amid growing complaints of restrictions on access to cash.
The move follows reports that several banks have imposed withdrawal limits, delayed transactions or declared foreign currencies unavailable, leaving customers struggling to access funds deposited in their domiciliary accounts.
According to Financial Vanguard, customers in Lagos and other parts of the country have complained about different practices adopted by banks, including limits on the amount of foreign currency that can be withdrawn over the counter and the alleged unavailability of US dollars and British pounds.
A visit to some banks in Lagos reportedly confirmed that the restrictions exist to varying degrees, with customers encountering different withdrawal conditions depending on the institution.
While some banks reportedly limit the amount customers can withdraw per transaction, others claim they do not have foreign currency available. Some have also offered customers lower denominations, including $20 notes, which some account holders believe are intended to discourage them from completing their transactions.
Customers report withdrawal limits and currency shortages
One customer of an old-generation commercial bank, Adebayo Ayomide, told the publication that he had requested to withdraw $5,000 but was informed by a teller that the bank could only dispense $3,000.
The teller reportedly expressed uncertainty over whether the customer would be able to withdraw even that reduced amount if he returned the following day.
At another commercial bank, a teller reportedly told a customer that US dollars were unavailable but advised him to keep following up in the hope that the currency would become available later.
The response reportedly prompted suspicion among some customers that foreign currency was being reserved for selected account holders.
One customer, who had received a similar response, alleged that some customers might be receiving preferential treatment, citing a friend who reportedly withdrew $4,000 from the same bank.
At another new-generation bank on Victoria Island, Lagos, a teller reportedly said US dollars were unavailable. However, a customer at the branch told the publication that he had just collected $1,000, adding that the maximum over-the-counter withdrawal permitted was $1,000, which he attributed to the scarcity of the currency.
CBN considers intervention
A source close to the CBN told Financial Vanguard that the apex bank was aware of the complaints and was preparing measures to address what the source described as the illegal withholding of customers’ foreign currency.
The source said the regulator had received several complaints from members of the public alleging difficulties in withdrawing cash from their domiciliary accounts, even when their requests complied with the applicable requirements.
The source added that the complaints included reports of banking practices and arrangements that could obstruct the timely and convenient fulfilment of legitimate withdrawal requests.
According to the source, the CBN was considering issuing a circular to advise banks against practices that unnecessarily restrict or delay legitimate cash withdrawals.
The proposed directive would also require banks to review their existing procedures and take immediate steps to ensure that customers’ legitimate withdrawal requests are appropriately honoured.
The source said the practices could create an impression of banking distress, particularly when customers are repeatedly unable to access their own deposited foreign currency.
However, the reported intervention had not been confirmed through an official CBN circular in the information provided by the publication.
Banks accused of retaining foreign currency cash
The reported restrictions have also raised questions about how some banks manage their available foreign currency cash.
Several banking sources told Financial Vanguard that some institutions might be trading with the foreign currency cash available to them rather than dispensing it to customers who request withdrawals.
The sources alleged that such activities could generate significant earnings for the banks, while customers face difficulties accessing their deposits.
The allegations have not been independently established, and the report did not identify the banks allegedly involved in such transactions.
For customers who operate domiciliary accounts, the issue is particularly significant because access to deposited foreign currency is a key expectation when opening and maintaining such accounts, subject to applicable banking requirements.
The complaints have therefore intensified calls for greater transparency in banks’ foreign currency withdrawal procedures and for the regulator to ensure that legitimate customer requests are handled appropriately.
The anticipated CBN intervention, if formally issued, could require banks to reassess their withdrawal practices and address the complaints over restricted access to domiciliary account funds.
