Banks reject payment to foreign business partners

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Deposit Money Banks (DMBs) are turning down payment requests from customers seeking to pay business partners abroad with naira debit cards.

According to The NATION reports, banks are asking customers paying clients abroad to do so in the currency of the beneficiary’s country, as against the previous practice where lenders debited the naira accounts of customers at the prevailing exchange rate and remitted dollar equivalent to the offshore beneficiary’s account.

It was gathered that the old practice was depleting foreign reserves and putting pressure on the naira – dollar exchange rate at a time Nigeria’s dollar earnings are on the decline due to low oil prices caused by the coronavirus pandemic.

Many banks are not only insisting that customers pay in the currency of the recipient’s country, but also that it must be through inflows from abroad in line with CBN’s domiciliary account policy, which directed that only electronic fund transfers into domiciliary accounts can be transferred from such accounts to third parties, while cash deposits into such accounts can only be withdrawn in cash.

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