Guaranty Trust Bank Limited (GTBank) has raised its monthly spending limit on Naira Mastercard from $100 to $200 for international POS and online transactions, GTBank disclosed in a statement forwarded to all customers on Friday 12, 2021.
The leading bank had reduced the international spending limit on its Naira Mastercard at the peak of the COVID-19 pandemic in 2020 when Nigeria’s foreign revenue plunged with global oil prices. The move was to allow the lender better manage the change in Nigeria’s economic realities while simultaneously servicing its large audience during the most challenging period of this era.
However, with the crude oil trading at over $86 a barrel and the Nigerian foreign reserves hovering at over $41 billion as of November 15, 2021, GTbank has now reviewed upward its international spending limit for only POS and online transactions. Meaning, international ATM withdrawal is still prohibited.
The bank, in the email to all customers, said “We would like to inform you that the monthly spending limit on your Naira Mastercard has been reviewed upwards from $100 to $200 for international online and POS transactions,” the bank stated in an email to customers.
“For further enquiries, please contact our Card Services Team at cardservices@gtbank.com or call GTConnect, our 24-hour fully interactive self-service centre, on 08029002900 or 08039003900 or reach us on WhatsApp via +23470016974994.”
Understanding International Spending Limit on Mastercards
The Central Bank of Nigeria (CBN) supplies GTBank and other financial institutions operating in Nigeria with the necessary dollar liquidity to meet customers’ demand for international payments like tuition fees, wire transfers for purchase of goods, etc.
But because the CBN’s dollar generating source, crude oil was badly hit during the peak of COVID-19, the apex bank could not sustain its intermittent dollar intervention program necessary to plug dollar deficit in Africa’s largest economy, leaving financial institutions scrambling with huge dollar backlogs.
Frustrated with no solution in sight, GTBank and other lenders started lowering international spending limits on their MasterCard for three reasons: 1, few unscrupulous individuals were alleged to be withdrawing uncontrollably at various ATMs abroad, in a suspected money laundering, at the detriment of genuine forex buyers looking to import raw materials into the economy.
2, Businesses or individuals dealing in items restricted from accessing Forex from CBN and Deposit Money Banks (DMBs) were using the Naira MasterCard to make payments for restricted items. In some cases, certain individuals were reported to have over ten MasterCards and encouraged family members to do the same.
3, The banks do not have dollar liquidity to meet rising forex demand from customers.
Why the Gradual Increase in International Spending Limit on GTBank MasterCard
The Central Bank of Nigeria recently halted the sale of forex to Bureau De Change Operators (BDCs) in Nigeria, accusing them of encouraging illicit financial flows, among others. The apex bank then directed all Nigerians to approach their DMBs for their forex needs. It means banks are now receiving more forex allocation than when forex interventions were being shared with BDCs.
Therefore, banks can better appropriate forex allocations unlike when the huge amounts were finding their way into the unregulated black market. This might have necessitated the upward review of international spending limit on GTBank’s POS and online transactions. Other banks are expected to follow GTBank step.