BUSINESS

Nigeria: Banks Cut FX Allowances To Customers By 50 Percent

 

Acting on the Central Bank of Nigeria (CBN) directive, deposit money banks (DMB) have announced an industry-wide decision to cut business, travelling allowance (BTA/PTA) payable to customers by fifty percent, citing foreign exchange (FX) scarcity in the country.

The new directive aim at a large reduction of FX allowance to travellers, when compared with $4,000 previously made available in a short period, provided the required documentation is met by the FX requisitor.

According to banks, payment of PTA/BTA is now subject to a maximum of $2,000 and two quarters in a year. The sum banks will give to their customer henceforth is 50% below the previous amounts as the foreign exchange crisis in Nigeria worsens.

Also, customers are required to give enough time for their allowances to be processed. Local banks adjusted the processing time for accessing Foreign Exchange (FX) for international school fees to 120 days from 48 hours.

Also, sources in the banking sector said FX allowance can only be disbursed within the week of the trip, saying that customers are encouraged to apply weeks ahead.

For upkeep, Banks said a maximum of $1,500 or its equivalent in other currencies will be given to students studying abroad per semester and limited to 2 semesters per session.

“Payment of school fees is subject to a maximum of $7,500 -or its equivalent in other currencies- per semester and limited to 2 semesters per session.

“A minimum of 16 weeks is required for processing school fees and upkeep/maintenance, after the submission of documents along with the approved Form A at the branch”, FirstBank told customers via email.

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Based on the latest directive, banks said applications for Form A for school fees, student upkeep and PTA/BTA, must be processed on the Central Bank of Nigeria’s Trade Monitoring System (TRMS) and must be in line with regulatory requirements.

Lenders maintained that though PTA/BTA is allowable, requests will continue to be treated on a first-come, first-served basis, subject to the availability of foreign currencies.

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