CBN new policy makes Western Union unattractive
Naijaholic
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Do you normally receive or are hoping to receive money through a Western Union payment in Nigeria? Well, collecting money through WU in Nigeria is no longer as attractive as it used to be, if you ask me. With CBN's new policy to stop payment of funds to beneficiaries in dollars or Pounds and rather in Nigeria, I don't think many people will still stick to using western union. Perhaps, people may now go for the option of receiving bank wires from abroad and for this, they'd just need a domiciliary account.When a Nigerian sends money from London or USA to Nigeria to their relatives or friends, the receiver already knows that Western Union payments are normally made in foreign currency, in a currency which the original receiver had sent it and for menay people, this carries a sentimental value.Who would like to receive cash when a relative sends a goat from the village? I think people prefer to receive gifts in the form and colour that they are sent and for Western Union, there is this joy beneficiaries derive from receiving payment in a currency their contact abroad actually sent it.CBN's new policy aims to pay receivers a naira value for the foreign currency that was sent to them and this would be based on the bank's official exchange rate which is normally lower than what those bank customers would get if they had to trade in the black market.What puzzles me is that I don't understand why the CBN wants to restrict foreign currency payments made out to customers by encouraging banks to pay in Naira while they don't at the same time encourage banks to use official rates for customers who may want to make payments or deposits in foreign currencies.When someone in Nigeria wants to send payments abroad, open a domiciliary account or get a foreign currency card product, most banks would tell you to source for your own dollars at the black market where the exchange rate is much higher. Yes, the CBN now wants bank customers to receive foreign currency payments at a much lower rate in Naira but will not enforce the same process for those who want to make payments in foreign currency in Naira at the official rate.I think, for the sake of justice and equity, both deposits and receivers of foreign currency funds should be able to have access to bank official rates for payments and money received in Nigeria in the local currency.What option do Western Union beneficiaries now have since CBN has lowered their spirits? Well, I think the best option is to tell your contacts to use bank wires to send the money to your domiciliary account and then make withdrawals in foreign currency from your account when you want to. I don't think the CBN policy for Naira payments involve withdrawals from domiciliary bank accounts yet.
Posted by Felix Okoli on Thursday October 10, 2013 at 8:42:32:
Posted by Felix Okoli on Thursday October 10, 2013 at 8:42:32: