A reporter posing as a customer asked a Lagos bank for $5,000 from a dollar account. The teller offered $3,000. Then he admitted he was not sure the customer would get even that if he came back the next day. It is the kind of experience behind a fresh CBN move on domiciliary account withdrawals.
A source close to the Central Bank of Nigeria told Vanguard that the regulator will compel lenders to honour legitimate domiciliary account withdrawals. Banks will also have to hand over the foreign currency customers ask for. A circular is expected soon.
The source said the CBN has received several complaints, including from people who had met every requirement for operating their accounts. He called the practice illegal and said measures were being prepared. At the time of writing, no circular or public statement from the CBN had appeared.
On domiciliary account withdrawals, customers who spoke to Vanguard described several tactics. Some banks cap what a person can take per transaction. Others say dollars and pounds are not available. A few will dispense only $20 notes, which customers say is meant to wear people down.
The source put it more bluntly. Banks know the CBN would frown on withholding customers’ money, he said. So they offer notes a customer will refuse, then blame the customer when the deal collapses.
Some replies sounded like a shrug. A teller at a new-generation bank told the reporter dollars were not available, but to keep following up because “maybe you will be lucky next time.
Luck did seem to matter. A customer who got the same reply at that bank said a friend had collected $4,000 there that day. The customer suspected cash was being kept for special clients. At a Victoria Island branch where a teller also said there were no dollars, a customer said he had just collected $1,000. He put the over-the-counter limit at $1,000 and blamed scarcity.
Banking sources went further. They told Vanguard that some banks may be trading the foreign cash they hold instead of paying it out. The earnings could be significant. That is an allegation, not a finding. The CBN has not confirmed it, and the report named no bank and carried no response from any lender.
The promise, at least, is old. The CBN made it in June 2023, after an extraordinary Bankers’ Committee meeting. Ordinary domiciliary account holders, it said, “shall have unfettered and unrestricted access to funds in their accounts”. Three years on, domiciliary account withdrawals still look like a negotiation at some Lagos counters.
The rulebook has moved on since. The fourth edition of the CBN’s foreign exchange manual, released in June, lets account holders initiate telegraphic transfers of up to $10,000 a day. It also does not require depositors to disclose the source of their funds. Yet the complaints on domiciliary account withdrawals reported so far all concern physical cash. Transfers are not the pinch point. Notes are.
The regulator has been here before. In a circular at the end of January 2024, the CBN told banks to sell off excess dollar stock by 1 February. It cited concern over the growing foreign currency positions they held. Nothing yet links that worry to today’s complaints about domiciliary account withdrawals. The pattern is still familiar.
The money behind domiciliary account withdrawals is large. CBN data analysed by BusinessDay put domiciliary balances at $28.92 billion in June 2023. Economist Adeola Adenikinju told the paper such accounts made up more than a third of bank deposits. Those figures are three years old. They still show how much money sits behind the queue at the counter.
The source said such practices could create the impression that some banks are struggling to meet foreign currency demand. That may be the regulator’s deepest worry. A lender that cannot hand over a customer’s dollars invites the wrong kind of talk. Delays in domiciliary account withdrawals are where customers notice it first.
So the test will not be the circular. It will be the counter, where domiciliary account withdrawals are judged one customer at a time. When a customer asks for $5,000 and walks out with $5,000, the promise of 2023 will finally have been kept.
