Nigerian bank raises dollar charges by 45.15%

Deepening foreign exchange scarcity has led some Nigerian banks to increase dollar charges by 45.15 percent per dollar, a customer who has been affected told BusinessDay.

“I performed a dollar transaction on my Globus account last month, I was charged N601 to a dollar. Then yesterday (Friday) I tried again and I was charged N595.08 to a dollar. There is no prompt to let you know that’s the rate you will be charged,” the customer said.

This implies that the bank charged an average rate of N598.04k per dollar compared to N412 percent which banks are supposed to charge after buying from the Central Bank of Nigeria (CBN) at N410 per dollar.

The customer who is a young mother working in a corporate organisation in Lagos, said, “until you get the debit alert before you know how much they charged to a dollar. Both transactions I performed were $100 and I was charged at those rates in September and October respectively.”

Reacting to the development, Uche Uwaleke, professor of finance at Nasarawa State University, Keffi, said, “That is outrageous. Something wrong must be going on there. I expect the bank customers to report to the Banking Supervision Department of the CBN.”

Uwaleke said for the CBN’s forex management policies to succeed, the banks need to be closely monitored especially now that the sale of forex to BDCs has been suspended.

Read also: Nigerian banks create dollar debit cards for PTA, BTA payments

Following the stoppage of dollar sales to the Bureau De Change (BDC) operators in July 2021 by the CBN, the Body of Bank Chief Executive Officers (CEOs) said Naira dollar exchange rate, which fell to as low as N527/$ per dollar in the same month, would recover to at least N423 per dollar but this has not happened.

The banks’ CEOs had in a zoom press conference said they have the infrastructure and the capacity to meet the legitimate foreign exchange demand of the end-users.

Such legitimate needs include Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medicals.

Herbert Wigwe, chairman of body of banks CEOs said banks were doing everything necessary to avoid abuse of foreign exchange, saying that the process would be centralized for better service delivery.

“Different banks are going to have different processes because you will have to look at your controls, you will have to look at what works for you. There is a lot of abuse around foreign exchange, so we might find that to better control this you might want to decentralise or centralise or a combination of the two,” Segun Agbaje, group chief executive officer GTCO Plc, said.