Banking
Banks Slash International Spending Limit as FX Shortage Deteriorates
By Adedapo Adesanya
Nigerian banks are coming under pressure as forex scarcity in the country worsens, coming up with new policies to reduce international spending limits for their customers.
On Wednesday, a top financial institution, Guaranty Trust Bank (GTBank) Plc, sent an SMS to its customers that it was slashing the international spending limit on its Naira Mastercard by 80 per cent to $100 per month from $500 it first reduced it to in March 2020.
In the message seen by Business Post, the tier-one lender said, “Dear customer, the monthly spending limit on your GTBank Naira Mastercard is now $100 for international transactions. Thank you for banking with us.”
The implication of this new development is that for now, customers cannot make payment for foreign purchases or transactions in Nigeria above $100 per month, which is less than N50,000 when converted to the Naira equivalent.
As of 2018, the spending limit on the bank’s Mastercard stood at $3,000 per month and this was when Dollar inflows into the country were fair, but within two years, things have gone worse for the country.
Since the beginning of the outbreak of COVID-19 in 2020, Nigeria has struggled to earn FX, especially from the sale of crude oil and this has put huge pressure on the local currency.
For two different times this year, the Central Bank of Nigeria (CBN) has had to adjust the value of the Naira to the Dollar this year first from N306 to N360 and then to N380.
Also, the regular weekly sale of forex to Bureaux De Change (BDC) operators has not resumed since it was suspended in March 2020 in the heat of the Coronavirus pandemic.
A historical analysis of the spending limit policy of GTBank showed that on March 25, 2020, the lender reviewed it to $1,500 from $3000.
“We would like to inform you that the monthly spending limit on your GTBank Naira Mastercard has been reviewed from $3,000 to $1,500 for your international online and POS transactions effective March 25, 2020,” the bank had said in a message to its customers.
However, as shocks from plunging crude prices gripped the country, reducing its dollar inflows, the lender once again reduced its international spending limit from $1,500 per month to $500 per month in the same March.
And now, less than six months later, it has been reduced to $100 per month.
Projections show that GTBank is not only the lender susceptible to make the change as more banks are expected to follow in coming days as evident in the past.
Just last month, Stanbic IBTC Bank said its customers will only be able to spend $500 per month in terms of offshore card transactions and placed a monthly limit of $100 on withdrawals.
Similarly, Zenith Bank Plc announced a temporary suspension of the use of debit cards for cash withdrawals abroad while it slashed the monthly sending limit for international card users to $200.
There are speculations that First Bank, Ecobank Nigeria, Fidelity Bank, UBA, Access Bank and others will soon adopt the same policy to reduce their monthly cash withdrawals for their customers when using their cards for offshore transactions.
Affected Nigerians across the social media platforms have made their displeasure known about this new development.
In July 2020, the central bank, as part of its efforts to support the Naira, placed an outright ban on the sale of forex to maize importers.
Business Post gathered that as at Tuesday, August 11, 2020, the amount left in the country’s external reserves stood at $35.6 billion.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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