The Central Bank of Nigeria, CBN, has explained that the decision of Deposit Money Banks to place a restriction on the use of Automated Teller Machine (ATM) cards abroad by bank customers, is as a result of scarcity of foreign exchange.
The apex bank said while it had no powers to reverse the restriction placed by the DMBs on the use of the ATMs abroad, it was in support of the decision as it would assist in reducing the pressure on the naira.
The Director, Monetary Policy Department, CBN, Mr. Moses Tule, who stated these in Abuja while speaking with journalists Monday, noted that the restriction might continue until the country could increase its forex earnings.
He said if banks had not taken the decision to restrict the use of the ATM cards abroad, some of them would currently be experiencing challenges meeting the overseas demand of their customers.
This, Tule added, would have caused huge liabilities in the balance sheet of the banks, thus affecting their operations.
He, however, said much as the CBN sympathised with Nigerians for the sufferings they were experiencing in carrying out transactions abroad, there was little the apex bank could do to reverse the decision of the banks.
He said, “The limitation on the use of debit or credit cards outside the country was not a limitation that was placed by the CBN.
“They were restrictions that Deposit Money Banks placed because they have to settle whatever transactions you make with your debit cards with their corresponding banks in foreign currency. And if the banks do not have the foreign currency to do that, then you create a liability problem for them”.
He said, going forward, the priority of the CBN would be to use the foreign exchange to settle matured Letters of Credit that had been opened for importation of petroleum products and other raw materials.
“Given the level of current flow into the reserves, by the time we meet these priority areas, you will discover that people who are using their debit cards overseas for shopping can never be on the priority list”, he added.