Commercial banks are exploring new ways to address Nigeria’s lingering Foreign Exchange challenge.
What are they doing?
International travelers in need of dollars for Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) will now have to procure travel debit cards as banks commence card-based dollar disbursements. The new procedure has been announced by many banks, including FirstBank and Access Bank.
How does this improve the forex situation in the country?
The objective of the new policy is to address the rising cases of abuse by travelers who take forex for trip-related purposes but use it for other things, including trading the funds at black markets. It is also a part of measures introduced by the Bankers’ Committee to digitally track forex transactions, stop the abuse of the system, and save scarce forex for the economy.
According to the Central Bank of Nigeria (CBN) guidelines, a company can access up to $5,000 BTA per quarter while an individual can access up to $4,000 PTA per quarter, which gives them access to up to $20,000 and $16,000 respectively per year. But in addition to the card-based disbursement, some banks are also limiting the number of times customers can access forex per year. In its notification to customers, titled “Updates on FX Purchase reads:”, FirstBank further indicated that PTA/BTA sales are limited to two quarters per year and that only applicants with approved Form A are eligible for payout.