The Central Bank of Nigeria (CBN) has launched an investigation into commercial banks following complaints over alleged restrictions on customers’ access to foreign currency held in domiciliary accounts.
The investigation comes amid growing concerns among bank customers, who allege that some deposit money banks (DMBs) are imposing cash withdrawal limits, rationing foreign currency and introducing procedural delays that make it difficult for account holders to access their funds.
Recent reports indicate that customers in major commercial centres, including Lagos, Abuja and Port Harcourt, have encountered difficulties when attempting over-the-counter cash withdrawals from US Dollar, Euro and British Pound domiciliary accounts.
According to insider sources familiar with the matter, the CBN’s Financial Policy and Regulation Department initiated the inquiry following a rise in petitions from individual depositors, trade groups and holders of foreign currency accounts.
The complaints centre on allegations that some banks are rationing cash payouts, imposing daily withdrawal caps or requiring customers to provide lengthy advance notice before they can withdraw foreign currency, despite having sufficient balances in their accounts.
“We have received formal complaints indicating that several commercial banks are imposing unauthorized limits on foreign currency cash payouts,” a senior apex bank official stated on condition of anonymity. “The CBN’s foreign exchange guidelines guarantee that customers who fund their domiciliary accounts via cash deposits or legitimate wire transfers have the right to unfettered access to their funds in line with existing regulations. Any bank creating artificial bottlenecks is acting in breach of operational standards.”
Alleged Cash-Rationing Practices
Some frustrated account holders and corporate customers have also alleged that certain branches employ measures that make substantial foreign currency cash withdrawals more difficult.
One of the complaints involves the alleged disbursement of foreign currency exclusively in low-denomination notes, such as $5, $10 or $20 bills, when customers request larger amounts.
Depositors claim that such practices can make sizeable withdrawals cumbersome and may encourage customers to accept digital transfers instead of cash.
Other reported complaints include:
- Unannounced daily caps: Customers allege that some branches impose withdrawal limits of as little as $500 or $1,000, regardless of available account balances.
- Extended notice periods: Some customers claim they are required to wait between five and 10 business days before collecting foreign currency cash, with branches citing the need to obtain “head office cash allocations”.
- Reported system and cash availability issues: Customers allege that network outages or foreign currency shortages are sometimes cited when cash withdrawals are requested, while other foreign exchange transactions continue to be processed.
Speaking to reporters outside a commercial bank branch in Victoria Island, Lagos, an import business operator shared his experience: “I came to withdraw $5,000 from my cash-funded domiciliary account to pay overseas vendors who only accept physical notes for incoming trade logistics. The branch manager told me they could only give me $1,000, and all in $20 bills. It feels like an artificial squeeze to retain forex liquidity on their balance sheets.”
CBN Examines Banks’ FX Cash Practices
The CBN’s investigation is expected to examine whether the reported restrictions are linked to foreign currency cash availability, localised liquidity pressures or possible breaches of applicable banking and foreign exchange rules.
The regulatory intervention comes against the backdrop of the CBN’s wider efforts to strengthen oversight of the banking system and promote confidence in formal financial channels. The apex bank’s current framework distinguishes domiciliary accounts from dormant accounts and has previously clarified that active domiciliary accounts are not affected by its guidelines on dormant accounts and unclaimed balances.
The CBN has also maintained cash-related policies governing withdrawals across the banking system, with revised cash policies taking effect from January 1, 2026.
Financial analysts note that while banks continue to operate within a changing macroeconomic and foreign exchange environment, they remain responsible for meeting their obligations to customers in accordance with applicable regulations and account terms.
“The integrity of the domiciliary account framework relies entirely on consumer trust,” said financial analyst and macroeconomic strategist Dr. Arinze Okafor. “If depositors begin to feel that putting forex into the banking system leaves their funds trapped, it risks driving foreign currency back into informal black-market channels. The CBN’s decision to investigate and enforce compliance is a critical step to safeguard confidence in the formal banking sector.”
Banks Face Regulatory Scrutiny
As part of the investigation, the CBN has reportedly directed affected commercial banks to provide records relating to foreign currency cash requests, payouts and vault balances across key branches over the past two quarters.
The inquiry is also expected to consider whether some banks are prioritising corporate customers or internal treasury operations over retail depositors when allocating available foreign currency cash.
The regulator is expected to take action where investigations establish breaches of applicable rules, including alleged unlawful restrictions on customers’ access to legitimate funds, unapproved charges or inaccurate representations about foreign currency availability.
The investigation underscores the importance of transparency and regulatory compliance in the management of Nigeria’s domiciliary banking system, particularly as businesses and individuals continue to rely on foreign currency accounts for international trade, remittances and other cross-border transactions.
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