Access, First Bank , others begin PTA/BTA disbursement with dollar cards

Deposit Money Banks (DMBs) operating in the country are set to stop further cash disbursements of foreign exchange for personal travel allowance and business travel allowance (PTA/BTA) as a means of stabilising the value of the Naira.These will now only be disbursed via a dollar travel card.

Access Bank and First Bank of Nigeria have said they will stop disbursing foreign exchange in cash as disbursement for PTA, BTA and other foreign exchange purchases.

The banks made this known in emailed notes to their customers, although some others have commenced disbursements through travel cards only in an effort to reduce the demand for cash and check customers who capitalise on the arbitrage.

FirstBank in a statement to its customers stated, “The full Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) of $4,000 and $5,000 respectively will now be disbursed into your FirstBank Travel Card. All applications will be in line with regulatory requirements. Kindly ensure that all PTA/BTA applications along with the approved Form A are submitted at the branch exactly 14 days before your proposed travel date. Sales is limited to two quarters a year.”

For school fees it noted that a minimum of 30 days is required for processing, after the submission of documents along with the approved Form A at the branch, subject to a maximum of $15,000 per semester and limited to two semesters per session.

For students’ upkeep, it stated, “Application for upkeep requires a minimum of 30 days for processing subject to a maximum of $3,000 (or its equivalent in other currencies) per semester, limited to 2 semesters per session. Evidence of payment of school fees for the current session, if school fee was not paid through FirstBank, will also be required.”

Access Bank on its part stated that, “We would like to once again inform you that we disburse authorised personal and business travel allowance FX requests through our Access Travel Debit Card. The Access Travel Debit Card has been created to enable you to transact seamlessly when you travel abroad.”

It added that, with this process, “customers can get instant issuance for PTA/BTA requests, easy access to international transactions via online, POS, and ATM and that the card is valid for three years and is usable for current and future PTA/BTA requests during its validity.”

However, one of the questions some Nigerians and business operators that have been affected by the continued exchange rate crisis are asking is: can travel allowance on debit cards curb FX pressure?

“This will not address the pressure but only serve as a control to monitor disbursement and usage,” said Ayodeji Ebo, managing Director/Chief business officer at Optimus by Afrinvest.

He said to reduce pressure, supply needs to increase significantly but the CBN is constrained due to the declining FX inflow from oil.

Taiwo Oyedele, head of tax and corporate advisory services at PwC, described the introduction of travel debit cards for the disbursement of PTA/BTA as a welcome development that could serve as a form of control to stem the abuse by those who are exploiting the system.

“I expect that an artificial intelligence mechanism will be built into the cards to ensure that travellers utilise their PTA/BTA in a manner that is consistent with their applications such as their travel destination,” he said.

According to him, the spending pattern can be analysed using big data to inform necessary policy changes in addition to enforcing the policy of returning unspent PTA/BTA to the CBN which has so far been difficult to implement.

“Overall this should have a positive impact in preserving our external reserve and improve the availability of forex for legitimate demands in the official windows. It may however result in further depreciation of the Naira in the parallel market in the short term as some of these illegal supply sources are cut off,” Oyedele said.

A traveller who has used the travel credit card shared his experience: “The card was loaded with dollars. It can lead to loss of money like in my case where the trip was to South Africa and their currency is rand. When I withdrew from the ATM, it was converted at a certain rate and that was where I started losing money.

“They impose other charges for making that withdrawal too. And there are also limits to how much you can get at a time daily, so the more transactions you carry out, the more charges you pay and the more money you lose.

“If you have anything unspent and decide to convert back to dollars, you lose again when the conversion is done. The card itself is expensive… They don’t tell you they will deduct the money for it until later, and that costs 10 or 13$.”

Another traveller who could not access FX said, “I applied for PTA and duly completed the Form A with required documents. I didn’t receive it before I travelled to Bangkok; approaching my bank to engage them, I was told I applied late and many people were still in line.”