CBN BANS USE OF CREDIT CARDS ABROAD

Banks have banned completely, use of the cards abroad, others specified countries where the cards are acceptable.

Standard Chartered Bank had in email to customers to this effect, stressed that their naira debit cards will no longer be used for international transactions, from January 1, 2016. It attributed the decision to limited foreign exchange supply in the market.

It said the action, remains a temporary measure that will be reversed when the forex supply improves.

Equally, Diamond Bank emailed its customers, specifying countries where their cards are acceptable. “Due to the current forex market realities, please be informed that your naira debit card has been restricted for usage in United Arab Emirates, China and African countries. We encourage you to make use of the Diamond USD Dollar or Diamond GBP debit card to transact in any of the above mentioned countries,” it said.

Zenith Bank has also done same through its email to its customers

The bank also promised its customers unlimited annual spend from their dollar and Pounds Sterling accounts; increased daily spend limit across all channels like web, Point of Sale (POS) terminals, Automated Teller Machines (ATMs) among others.

Such spends, it said, will not attract conversion fee on transactions done in card’s denominated currency and also chip and PIN protection.

Analysts said the policy shift is part of government’s effort to stem the flow of foreign exchange out of the country. In June, the CBN banned businesses from accessing hard currency to import about 40 items. The list included Indian incense, plastic and rubber products, soap and even private jets. The amount that Nigerians could spend on credit cards abroad has already been reduced by the banks.

The fall in crude oil prices has reduced Nigeria’s dollar earnings, making it difficult for the CBN to fund imports. The Nigeria’s crude oil – bonny light, which traded at $110.2 per barrel in January 2014, reaching $114.6 per barrel by June of the same year, now trades below $37 per barrel on December 15.