CBN says it can't reverse ATM card ban abroad

The Central Bank of Nigeria has said the decision of
Deposit Money Banks to place a restriction on the
use of Automated Teller Machine cards abroad by
bank customers is due to 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, the CBN 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 said these in Abuja while
speaking with journalists, explained that the
restriction might continue until the country could
increase its foreign exchange earnings.
He said if banks had not taken the decision to
restrict the use of the ATM cards abroad, some of
them would current be experiencing challenges
meeting the overseas demand of their customers.
This, he added, would have caused huge liabilities
in the balance sheet of the banks, thus affecting
their operations.
Tule said much as the CBN sympathised with
Nigerians for the sufferings they were experiencing
in carrying out transactions abroad, there was little
it 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.
On the devaluation of the naira, Tule said President
Muhammadu Buhari had, using the budget, given a
policy direction on what the CBN should do, adding
that “hard choices” would be taken next year by the
bank.
He, however, failed to provide details of what he
meant by hard choices.
He said, “If you read the budget speech of the
President, there was one sentence there where he
said we must make hard choices in 2016. The
budget is designed to open the growth potential of
the economy and the President has said we must
make hard choices.
“As policymakers, we are going to make those hard
choices so at the right time, the CBN will take the
appropriate decisions that will strengthen the
foreign exchange market.”