SAN FRANCISCO, March 06, (THEWILL) – The Central Bank of Nigeria, CBN, has given banks 24 hours to meet all forex requests for Personal Travel Allowances, PTA, and Business Travel Allowances, BTA, even as it pegged the maximum volume of BTA approved for sale per customer at $5,000 quarterly and $4,000 for PTA customer.
The regulator also announced at the weekend a 48 hours timeline for banks to meet all foreign exchange, forex, requests for school fees (including allowances) and medical bills applications, adding that it expects such retail transactions to be settled at a rate not exceeding 20 per cent above the interbank market rate or at N375 to the dollar.
A circular to all authorised dealers signed by CBN Director, Financial Markets Department, Alvan Ikoku, explained that the new timeline was meant to increase foreign exchange liquidity in the market, and ensure availability to end-users.
The CBN, which also directed commercial banks to open teller points in all locations to ensure access to foreign exchange by their customers, warned that non-compliance with the directives would attract sanctions, including but not limited to being barred from all CBN forex interventions.
The circular added that lenders are also expected to have electronic display boards in all their branches showing rates of all traded currencies.
“Banks are hereby directed to process and meet the demand for Personal Travel Allowances and Business Travel Allowances customers within 24 hours of such applications. They are to equally process and meet the demands for school fees (including allowances) and medical bills within 48 hours of such applications,” it read.
The CBN has been implementing a new foreign exchange policy, which makes greater provisions for commercial banks to get more dollars to fund forex users at the retail end of the market. The apex bank has subsequently increased its level of interventions in the interbank market where it constantly injects dollars to raise market liquidity and stabilise the naira.
“Having cleared the historic backlog of matured letters of credit at the inception of the current flexible exchange rate system, the CBN would immediately begin to provide foreign exchange to all commercial banks to meet the needs of both PTA and BTA for onward sale to customers. All banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements,” said the regulator.
It would be recalled that the CBN had earlier promised to meet the needs of parents, guardians and sponsors for school fees. Such payments must be made by commercial banks directly to the institution specified by the customer.
It also promised to ensure that this process is as smooth as possible and that as many customers as possible get the foreign exchange they genuinely demand. The apex bank warned that it would neither tolerate unscrupulous actions nor hesitate to impose sanctions on offenders, be they banks or their staff.
The new forex rules will also equally to customers seeking to make payments or purchase foreign exchange for medical bills and paid directly to hospitals. The supply of foreign exchange to retail end-users will be sustained by the central bank.
The CBN enjoined market participants to assist in ensuring that the new measures bring about the preservation of the nation’s external reserves, stability of the financial system, and growth of the economy to the benefit of all Nigerians.
