Banks resume sales of PTA, BTA to customers

Some banks have resumed selling Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) to their customers, signaling a shift in foreign exchange availability after previous challenges tied to supply shortages.

The development comes as financial institutions adjust to evolving market conditions and Central Bank of Nigeria (CBN) policy changes.

In an announcement to its customers, First Bank of Nigeria disclosed the resumption of foreign currency sales for various international transactions. The bank outlined that customers can now access foreign exchange for PTA, BTA, payment of school fees, medical bills, and other approved transactions under Form A. To ensure a smooth application process, First Bank said that all Form A applications, including those for school fees, student upkeep, PTA, BTA, and medical bills, must be processed through the CBN’s Trade Monitoring System (TRMS) portal, with all required supporting documents uploaded.

Ayokunle Olubunmi, head of financial institution ratings at Agusto Consulting, offered insight into the dynamics of the foreign exchange market. He explained that when the gap between official and parallel market rates was small, there was little incentive for customers to approach banks for PTA. In fact, there were instances when the official market rate exceeded the parallel market rate, prompting individuals to favour the latter.

Read also: Airtime demand seen unchanged as tariff set to rise

However, Olubunmi noted that the widening margin between these rates has now driven more Nigerians to seek PTA and BTA directly from banks.

The shift aligns with policy adjustments implemented by the CBN over the past year to stabilise the foreign exchange market. Early in 2024, the CBN directed International Money Transfer Operators (IMTOs) to quote exchange rates for Naira payouts based on prevailing market prices, reflecting a move toward market-determined rates. In February 2024, the CBN removed restrictions on the spread for interbank foreign exchange transactions and lifted limits on the sales of interbank proceeds. It also mandated that PTA and BTA payouts be made exclusively through electronic channels, a measure analysts at Afrinvest Securities Limited believe will mitigate foreign exchange round-tripping in this segment.

Despite these measures, challenges persist. Ugodre Obi-Chukwu, founder and CEO of Nairametrics, commented on the inconsistency of PTA and BTA availability in banks. “Officially, banks will tell you they are selling PTA and BTA, but when you go to access it, the process becomes complicated,” he explained. Obi-Chukwu noted that in late 2023, customers frequently reported difficulties obtaining PTA from banks, with many being told it was unavailable. However, he acknowledged that customers with dollar deposits in their accounts could access their funds. “The cash is there. If you have dollars in your account, they will give it to you. But for PTA specifically, I can’t say for sure,” he added.

The resumption of PTA and BTA sales by some banks may reflect improvements in foreign exchange liquidity, but it also highlights the complexities of navigating Nigeria’s evolving financial landscape. While CBN policies aim to reduce volatility and improve transparency in the foreign exchange market, the effectiveness of these measures will depend on their implementation and the continued availability of foreign exchange resources, and investment analyst said.