The Central Bank of Nigeria has instructed Nigerian banks to stop paying personal and business travel allowances to customers in cash. It said this in a circular signed by Dr Hassan Mahmud, director of the trade and exchange department.
The apex bank said that the payments— including through debit or credit cards – will now be through electronic channels only.
It stated,
“Memorandum 8 of the foreign exchange manual and the circular with reference FMD/DIR/CIR/GEN/08/003 dated February 20, 2017, stipulate the eligibility criteria for accessing personal and business travel allowances (PTA, BTA).
“In line with the bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, all authorised dealer bank shall henceforth effect payout of PTA,BTA through electronic channels only, including debit or credit cards.
For the avoidance of doubt, it stressed that “payment of PTA/BTA by cash is no longer permitted.”
The bank also advised authorised dealers and the general public to note and comply accordingly.
Recall that the CBN also recently imposed limits on how much banks can hold in foreign currencies.
The CBN expressed concerns about the growth of forex exposures on their balance sheets as naira continue to depreciate against US dollar.
With the depreciation of naira more Nigerian banks created an incentive for banks to hold excess long foreign currency position and CBN is worried.
CBN moves to protect banks customers
The Central Bank of Nigeria (CBN) has instructed Nigerian financial institutions to display their corporate names on all their online business platforms which includes websites, portals, and mobile apps.
The directive affects banks, payment services providers, and international money transfer operators.
The CBN gave the directive in a circular signed by Haruna Mustafa, the CBN’s director of financial policy and regulation.
