CBN limits usage of naira denominated cards overseas by 66.7% to $50,000

Effective immediately, the existing limit on the usage of naira denominated cards for transactions overseas has been reviewed downward, the Central Bank of Nigeria (CBN) has said.

Consequently, the apex bank now pegs it at $50,000 per person per annum, representing 66.7 percent below $150,000 it stood.

According to the CBN, authorised dealers are to ensure that the daily cash withdrawal limit embedded in the cards per person, per day is pegged at $300.

Olakanmi Gbadamosi, director, trade and exchange department, CBN, in a circular to all authorised dealers and the general public informed them of the latest development.

The CBN urged the authorised dealers to ensure strict compliance with the new limit and render monthly returns of the transaction to the director trade and exchange department, CBN, not later than the 5th day of the following month.

Part of the circular reads: “Further to the circular referenced No. TED/FEM/FPC/GEN/01/009 of September 26, 2013, all authorised dealers and the general public are hereby informed that with effect from the date of this circular (April 13, 2015) the existing limit on the usage of naira denominated cards for transactions overseas has been reviewed downward”.

The CBN and the Bankers’ Committee had agreed to reduce the limit of debit card usage abroad. This is following the discovery that people are using naira debit card in a manner that were not expected.

Explaining further at the Bankers’ Committee meeting held in Lagos last week, Tokunbo Martins, director of banking supervision, CBN, said, “This specifically refers to the use of these cards abroad because when they are used abroad, the merchant has to be settled and even if it is ATM the provider has to settle in foreign exchange, so we found that will put a drain on foreign exchange resources available to finance the industry. There is going to be a reduction in the allowable draw down using naira debit cards abroad”.