In response to the worsening foreign exchange crisis, Deposit Money Banks have reduced the amount of Personal Travel Allowance and school fees their customers are eligible for.
Due to a lack of foreign exchange, lenders have recently been forced to take extreme measures in order to fulfil their dollar obligations.
On Tuesday, some DMBs reduced the amount of PTA their clients can apply for from $4,000 to $2,000 in an email to clients.
Customers of First Bank of Nigeria Limited, one of the lenders, were advised to submit their various FX requests several weeks beforehand.
Further, lenders reduced the $15,000 per semester payment for international school fees to $7,500.
The title of the lender’s bulk email was “Important update on FX purchase.”
Additionally, the bank stipulated that only two requests may be filed annually.
It suggested that clients submit their applications several weeks before their vacation.
Part of the letter was read: “At First Bank, we value you and are committed to keeping you informed on changes regarding foreign currency (Form A) requests. In view of the limited FX supply in the industry, kindly note the following:
“Payment of PTA/BTA is subject to a maximum of $2,000 and two quarters in a year, while funds will be disbursed within the week of the trip. Customers are encouraged to apply for PTA/BTA some weeks ahead of their trip.”
It added that, “Application for upkeep is subject to a maximum of $1,500 (or its equivalent in other currencies) per semester and limited to two semesters per session.
“Payment of school fees is subject to a maximum of $7,500 (or its equivalent in other currencies) per semester and limited to two semesters per session. A minimum of 16 weeks is required for processing school fees and upkeep/maintenance, after the submission of documents along with the approved Form A at the branch.”
According to the email, application for Form A for school fees, student upkeep and PTA/BTA, must be processed on the Central Bank of Nigeria’s Trade Monitoring System and must be in line with regulatory requirements.
According to the email, Form A applications for school fees, student maintenance, and PTA/BTA must be processed on the Trade Monitoring System of the Central Bank of Nigeria and must adhere to legal standards. It added, “Requests will continue to be treated on a first come, first served basis, subject to availability of FX. Ensure that your account is sufficiently funded.”
For the purpose of closing the gap between the official and black-market rates of the naira, economists and financial professionals have encouraged the Central Bank of Nigeria (CBN) to weaken the local currency.
