Standard Chartered Bank has stated that it will suspend international spend on its Debit card starting from August 1st 2022
The bank stated this in a mail to customers which was signed by its head of deposits, debit cards and mortgages.
Meanwhile, the bank said the International spend limit on the bank’s credit card remains at $1,000 monthly and Foreign Currency Debit Card limits remain unchanged.
What the bank is saying
It stated, “Kindly be informed that effective August 1, 2022, International spend on our Naira Visa Debit Card will be suspended.
“International spend limit on our Bank Credit Card however remains at $1,000 monthly and Foreign Currency Debit Card limits remain unchanged.
“Thank you for banking with us. As always, we remain committed to providing you best-in-class financial solutions.”
Why this matters
This announcement matters because Standard Chartered is one of the top three Nigerian banks that attract significant forex inflows.
By shutting out using naira cards for international transactions, they are sending a clear message that the forex situation is also affecting some of the most dependable banks.
It also suggests most Nigerians looking to pay for their foreign subscriptions and other international spend may have to start looking for alternatives.
What you should know
Nigerian banks have in recent weeks reduced their monthly international spending limit on Naira cards.
In February, United Bank for Africa informed their Nigerian customers that the limit on cards was reduced to $20 per month from $100 per month. It added that customers can only perform ATM cash and purchase/payment via POS terminals only locally.
Similar to this, in March, Zenith bank also reduced the international spending limit on its naira cards to $20, adding that it was temporarily suspending international ATMs and point of sales (POS) transactions.
The reduction and in some cases, outright restrictions on the use of debit cards is related to the scarcity of forex that has hit the Nigerian economy in recent weeks.
The central bank has drastically reduced how much forex it makes available to banks and BDCs preferring to focus only on selling to critical sectors.
This has exacerbated the forex scarcity in effectively moving most demand to the black market. With the exchange rate now increasing nearly everyday, it appears this is creating significant risk for banks if they remain exposed to allowing their customers spend their naira debit cards for international transactions.
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