CBN Moves to Protect Customers as Banks Face Scrutiny Over Forex Withdrawals

CBN Moves to Protect Customers as Banks Face Scrutiny Over Forex Withdrawals

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 complaints involve customers who say they have faced difficulties withdrawing dollars and other foreign currencies from their accounts, even when they meet the requirements for making the withdrawals.

Checks at some bank branches in Lagos found different forms of restrictions. Some banks reportedly limited the amount customers could withdraw per transaction, while others said US dollars or British pounds were unavailable.

In one case, a customer requesting $5,000 was reportedly told that only $3,000 could be dispensed. At another bank, a customer was reportedly told that US dollars were unavailable and advised to keep checking back. Another customer at a Victoria Island branch said he had just withdrawn $1,000 and was told that was the maximum available for an over-the-counter dollar withdrawal at the time.

The CBN is now looking into the complaints and is preparing measures to address the situation.

A source close to the apex bank said the regulator had received several complaints from members of the public about difficulties accessing cash from their domiciliary accounts. The proposed response includes a circular directing banks to stop practices that unnecessarily restrict or delay legitimate foreign-currency withdrawal requests.

Banks are also expected to review their existing procedures and ensure that legitimate withdrawal requests are properly handled in line with applicable requirements.

There are separate allegations from banking sources that some financial institutions may be using available foreign-currency cash for trading rather than releasing it to customers seeking to withdraw their deposits. The allegation has not been independently established, and no specific banks have been publicly identified.

The reported restrictions come despite the CBN’s revised foreign-exchange framework, which provides ordinary domiciliary account holders with access to their foreign-currency balances, subject to applicable banking and regulatory requirements.

For now, the proposed CBN circular has not been formally published. Banks therefore remain subject to the existing rules until any new directive is officially issued.

If the planned intervention goes ahead, banks will have to review how they handle cash withdrawals from domiciliary accounts and address practices that unnecessarily prevent customers from accessing legitimate foreign-currency funds.

Have you experienced any difficulty withdrawing dollars or other foreign currency from your domiciliary account? Share your experience with us.