*Earn billions charging black market rate on foreign transaction
Dr. Peregrino Brimah
02 November 2015, Sweetcrude, Lagos – Nigerian banks have been defrauding unsuspecting customers who engage in foreign transaction either withdrawing cash from Automated Teller Machines, ATM, or pay for services with their debit cards.
Investigations revealed that since December 2014, Nigerian banks have charged customers hidden fees on single international ATM withdrawals that convert Naira at the Black market rate and widely above the official Central Bank conversion rate.
rather than weigh in to protect unsuspecting customers the Central Bank of Nigeria, CBN has given added impetus to the ongoing fraud by reducing the international withdrawal rates to a daily N60,000 cap or $300.
With each withdrawal of a permitted $280 in cash obtained at the ATM, Nigerian commercial banks bill their customers upwards of $319, indicating a whopping $39 extra per withdrawal.
In Naira terms, a withdrawal of N63,140 charged to the card gives $280 at the ATM. This $280, converted at the official CBN rate of N199/$ would be only N55,720, Which leaves an additional N7,420 to the banks per transaction. This amount does not include the international ATM transaction fee of N330, additionally billed.
N7,420 extra on each withdrawal, divided at the official CBN rate amounts to $38 forcefully taken off the customer.
Some Nigerian banks charge N420 as international ATM transaction fees , indicating that when the official fee is taken out, an additional N7000, about $35 is taken off the bank customer per transaction.
If the total withdrawal amount in Naira (N63,140) as at this today, is converted to the $280 received from the ATM, this converts at a rate of 225 Naira to the dollar which is the prevailing black market rate.
When a Nigerian bank customer uses a debit card at the ATM abroad, he sees his balance in dollars, which is the current CBN rate. But when he withdraws $280 cash, his receipt and balance reflects $319 withdrawn.
for reasons that remain unclear, the banks do not separate the charges on the receipts or account page to give a breakdown of the conversion rate or that which constitutes charges.
This scenario makes it difficult for bank customers to determine just how much they’ve been fleeced by their banks who apply Black market rate as against CBN regulations.
Nigerian bank customers using ATM cards abroad includes those studying, on vacation, engaged in business ventures, among other purposes.
*Dr. Peregrino Brimah; http://ENDS.ng [Every Nigerian Do Something] Email: firstname.lastname@example.org Twitter: @EveryNigerian