Nigerian Banks Stop Accepting Dollar Deposits

In a press conference at the weekend, Nigerian commercial banks has banned accepting dollar cash deposited due to large speculation on the currency.

 

In a conference call at the weekend, the chief executive of First City Monument Bank, Ladi Balogun, told reporters that Nigerian banks have stopped receiving foreign currency deposits as the over $1 billion cash sitting in their vaults is of no use to them and the depositors have refused to sell.

The FCMB CEO disclosed further that banks are no longer accepting dollar cash due to large speculation on the currency. Many of the banks have at the weekend sent emails to their customers to notify them of the new development, citing the unavailability of outlets for managing the inflow of foreign currency cash deposits as reasons.

The CBN had at the weekend commended the move by commercial banks to curtail the acceptance of foreign currency cash deposits, saying it is in line with global best practice. A statement by the CBN director, Corporate Communications, Ibrahim Mu’azu, reads, “We note and applaud that in line with global best practice Nigerian banks have started to curtail the acceptance of foreign currency cash deposits, much the same way as customers in other countries cannot just walk into banks and make foreign currency cash deposits without proper documentation.”

As at last week friday, the value of the naira appreciated at the black market, rising to N215 to the dollar and N350 to the British Pounds. Traders at the black and bureau de change markets said that they expect the value of the naira to further appreciate this week on the back of the move by the banks.

Commenting on this development, the managing director and chief executive of RTC Advisory Services, Opeyemi Agbaje, said; “The dollars in their vault is useless. They want it in their bank accounts so that they can trade with it, and it is only the CBN that can help them do that. This is why they are refusing to accept more dollar deposits,” he said.

Lending support to the decision of the CBN not to take the dollar cash off the banks, Agbaje said, “We should force that cash to be monetised. If you have dollar cash, sell it, and have naira so that we can have some supply of dollar in the market and hopefully reduce the exchange rate. I think that the CBN should stick to its ground and put some pressure on the system to begin to sell those dollars to the market.”