The Central Bank of Nigeria (CBN) is investigating commercial banks accused of restricting customers’ access to funds in their domiciliary accounts. It plans to compel the banks to honour all legitimate withdrawal requests.
Financial Vanguard learnt that the apex bank will issue a circular directing banks to dispense foreign currencies as requested by account holders.
Customers told Financial Vanguard that banks have adopted different tactics to block full or partial cash withdrawals from foreign currency accounts. Visits by our reporters to some banks in Lagos confirmed the practice, which customers say is also common in other parts of the country.
Some banks cap the amount a customer can withdraw per transaction. Others claim US dollars and British pounds are unavailable, while a few offer only lower denominations such as $20 notes.
One customer, who spoke on condition of anonymity, said the tactic allows banks to appear compliant with CBN rules while making it difficult for account holders to reach their money.
$5,000 request cut to $3,000
At an old-generation bank, a teller told our correspondent, who posed as a customer requesting $5,000, that only $3,000 could be dispensed. The teller added that there was no guarantee the customer would get even that amount if he returned the next day.
At a new-generation bank, another teller said: “US dollars are not currently available, but you can keep following up. Maybe you will be lucky next time.”
A customer who received a similar response at the same bank suspected favouritism. “I think they are keeping it for some of their special customers,” he said, adding that a friend had told him to come because he had just collected $4,000.
At another new-generation bank on Victoria Island, Lagos, a teller said dollars were unavailable, yet a customer said he had just collected $1,000. He added that $1,000 was the maximum a customer could withdraw over the counter in US dollars, blaming the limit on scarcity of the currency.
CBN moves to curb practice
A source close to the CBN told Financial Vanguard at the weekend that the apex bank was aware of the situation and was working on measures to stop what he described as an illegal practice by some banks.
He said: “The Central Bank of Nigeria has received several complaints from the general public alleging difficulties in withdrawing cash from their domiciliary accounts, even when withdrawals are made in accordance with the applicable requirements for the operation of their accounts.
“These complaints include reports of practices and arrangements that may impede the timely and convenient fulfilment of legitimate withdrawal requests.”
The source added that the banks know what they are doing and know the CBN would frown on it. “They will offer the lower denomination that you cannot accept and thereby blame you for the failure of the transaction,” he said.
Circular expected soon
Confirming that an investigation was ongoing, the source said the circular would advise banks “to desist from practices that unnecessarily restrict or delay legitimate cash withdrawal requests, which create an impression of banking distress.”
Banks will also be directed to review their current practices and take immediate steps to ensure legitimate withdrawal requests are honoured, he added.
Banks accused of trading forex cash
Banking sources told Financial Vanguard that some banks may be trading with the foreign currency cash in their vaults instead of paying it out to customers, earning significant income from it.
The development has heightened concerns among domiciliary account holders, who expect reasonable access to their foreign currency deposits when they make withdrawals in line with banking requirements.
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