CBN Probes Banks’ Restriction of Customers’ Access to Forex Accounts

The Central Bank of Nigeria (CBN) is investigating complaints that some commercial banks are restricting customers’ access to foreign currency held in their domiciliary accounts.

The development comes amid growing complaints from bank customers who say they have encountered difficulties withdrawing legitimate funds from their foreign currency accounts.

Reports indicate that some banks have introduced limits on the amount of foreign currency customers can withdraw over the counter, while others have cited the unavailability of currencies such as US dollars and British pounds.

Some customers have also reported being offered only lower denominations, making it difficult to withdraw the amount requested.

The CBN is said to be preparing measures to address the situation and ensure that banks honour legitimate withdrawal requests in accordance with applicable requirements governing domiciliary accounts.

The apex bank is also expected to issue a circular to commercial banks directing them to review practices that unnecessarily restrict or delay legitimate cash withdrawals.

The investigation follows complaints from customers across different parts of the country, with similar concerns reportedly emerging in banks operating in Lagos and other locations.

In some instances, customers requesting several thousand dollars have allegedly been told that only a smaller amount could be provided. Others were reportedly advised to return at another time because the requested currency was unavailable.

The CBN is examining whether such practices are consistent with existing regulations and the obligations of banks to customers who maintain foreign currency accounts.

A source close to the apex bank said the regulator had received several complaints alleging difficulties in withdrawing cash from domiciliary accounts, even when customers complied with the applicable requirements.

The source said the CBN was considering measures to prevent practices that could unnecessarily impede legitimate withdrawals or create an impression of banking distress.

There are also allegations from banking industry sources that some banks may be retaining available foreign currency cash for other transactions instead of dispensing it to customers. These allegations form part of the broader concerns surrounding access to physical foreign currency.

The CBN is expected to provide further guidance to banks as its review progresses.

The development comes as the apex bank continues to strengthen supervision of the banking sector and its foreign exchange operations.

For customers operating domiciliary accounts, the outcome of the CBN’s intervention could determine whether banks introduce more consistent procedures for processing legitimate foreign currency withdrawal requests.