CBN, banks at war over restrictions on Dollar, Pounds domiciliary accounts

CBN investigates banks over restrictions on domiciliary account withdrawals
CBN investigates banks over restrictions on domiciliary account withdrawals.

The Central Bank of Nigeria (CBN) is investigating commercial banks over complaints that customers are being prevented from accessing money in their domiciliary accounts.

A source close to the apex bank told Vanguard that the CBN has received several complaints from customers who have been unable to withdraw cash from their foreign currency accounts despite meeting the required conditions.

The source described the practice as unacceptable and said the CBN is working on measures to stop banks from placing unnecessary restrictions on legitimate withdrawals.

According to the source, the apex bank may soon issue a circular directing banks to stop practices that delay or restrict customers from withdrawing their money.

The circular is also expected to direct banks to review their current practices and process legitimate withdrawal requests without unnecessary delays.

Some bank customers told Vanguard that banks use different methods to limit withdrawals from domiciliary accounts.

Checks at some banks in Lagos showed that the practice exists in different forms, while customers in other parts of the country also reported similar experiences.

Some banks reportedly place limits on the amount of foreign currency a customer can withdraw at once. Others tell customers that United States dollars or British pounds are not available.

In some cases, customers are offered only lower denominations, such as $20 notes. Some customers believe this is intended to discourage them from completing their withdrawals.

One customer, who spoke anonymously, said the situation allows banks to appear to follow CBN rules while making it difficult for customers to access their own funds.

In one instance, a Vanguard reporter who visited an old generation bank and requested to withdraw $5,000 was told that only $3,000 could be made available.
The teller was also unable to confirm whether the remaining amount would be available the following day.

At another new generation bank, a teller said dollars were not available but advised the customer to continue checking back.

A customer at the same bank suspected that the available foreign currency was being reserved for some preferred customers. The customer said a friend had recently withdrawn $4,000 from the bank.

At another new generation bank on Victoria Island, Lagos, a customer who had just withdrawn $1,000 said that was the maximum amount available for over the counter withdrawal. The customer attributed the restriction to the shortage of foreign currency cash.

Banking sources also told Vanguard that some banks may be using available foreign currency cash for other transactions instead of releasing it to customers who want to withdraw their funds.

The CBN’s planned action is expected to address the complaints and ensure that customers who meet the requirements can access legitimate funds in their domiciliary accounts without unnecessary restrictions.