One of the big banks in Nigeria, GTBank Limited, has announced an upward review of the monthly spending limit on the Naira Mastercard of its customers for international transactions.
A notice obtained by Business Post on Friday, November 12, 2021, disclosed that the new spending limit is now $200 instead of the former $100.
Reason for a spending limit
The lower spending ceiling was initially introduced in the banking system as part of efforts of the Nigerian government to address the scarcity of foreign exchange (FX).
Lower prices of crude oil last year forced the Central Bank of Nigeria (CBN) to ration the supply of forex to the system and this put pressure on the Naira, forcing banks to trim the offshore spending limit of their customers.
Crude oil is the main commodity Nigeria sells to earn hard currency and the lockdowns imposed across the globe last year to curb the spread of COOVID-19 meant a decline in the demand for fuel, which affected prices.
Now that most economies are opening up and are bouncing back to the pre-COVID era, prices of the black gold at the international market are higher and this is making the country earn more FX, with the reserves expanding by the day.
This may have informed the decision of financial institutions, including GTBank, to increase the monthly spending limit of customers when they execute transactions across the borders with their Naira cards.
“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.
“For further enquiries, please contact our Card Services Team at [email protected] or call GTConnect, our 24-hour fully interactive self-service centre, on 08029002900 or 08039003900 or reach us on WhatsApp via +23470016974994,” the emailed message stated.
What this means
With this development, GTBank Naira Mastercard holders cannot pay more than $200 in a month to pay for any service rendered by a foreign entity, either for shopping or others. It means customers would not be able to make payments for transactions above the limit in a particular month.
Not first time
This is not the first time GTBank is taking similar action as just over a year ago, it increased the spending limit to $200 from $100 per month after there was a moderate calm in the forex market.
Some banks had reduced their thresholds to $20 monthly as a result of the forex crisis caused by the coronavirus pandemic.