In a move set to revolutionize the foreign exchange market, GTCO, the parent company of GTBank, has launched a new product that allows customers to instantly convert dollars to naira through its internet banking platform. This innovative solution is expected to significantly impact black market operators who have traditionally dominated this sector.
With GTBank’s new service, bank customers can conveniently convert the dollars in their domiciliary accounts to naira from the comfort of their homes or offices. Currently, GTBank is the only financial institution providing this feature through its internet banking solutions, although other banks are expected to follow suit in the near future.
According to GTBank, customers are allowed to convert up to $50,000 to naira on a daily basis. However, the option to convert naira to dollars is not currently available, as some customers have noted. Despite this limitation, the new product offers numerous advantages over transacting with street traders, commonly referred to as ‘Aboki.’
Lagos-based investment banker, who preferred to remain anonymous, emphasized the minimized risks associated with street transactions. These risks include accepting counterfeit currency and encountering unfavorable exchange rates. The banker also expressed optimism that the new product would enhance dollar inflows into the country’s foreign exchange (FX) market.
The introduction of this forex product has been met with widespread enthusiasm on social media platforms. Oluwaseun Tijani, a tech enthusiast, tweeted, “This makes a lot of sense, especially for remote workers struggling to exchange their foreign earnings. With this, there is no need to withdraw at the center and run after Aboki before exchanging FX.”
Twitter user HallenjayArt echoed similar sentiments, suggesting that the parallel market would slowly diminish in significance. GTBank’s announcement received positive feedback from customers who confirmed the convenience and efficiency of the new service. One satisfied customer, Wilson Erumebor, a senior economist at the Nigerian Economic Summit Group (NESG), tweeted, “I tried this and it worked! The exchange rate was $1/N771.5. We have been living in bondage since. We simply incentivized inflow into the parallel market and created that wide gap for no good reason.”
Erumebor further argued that if it were easier to transfer foreign currency between banks without complications, rates would become more competitive across institutions. He criticized the unnecessary regulations that breed corruption and arbitrage, suggesting that people should be able to transfer funds freely across banks.
Although some users expressed concern about the exchange rate of N771 to a dollar being too high, others saw an opportunity for arbitrage. Samson J, an estate manager, tweeted, “That means I can buy from the black market and deposit it into my GTBank dollar account to make more money.”
On Tuesday, the dollar was quoted at N763 compared to N768.17 on Monday at the Investors and Exporters (I&E) forex window, according to data from the FMDQ. The Central Bank of Nigeria (CBN) recently consolidated segments of the official FX market into a single I&E window, reintroducing the “willing buyer and willing seller” system. As a result, the official rate rose from N463.38/$ to the current rate of N763, as stated in a circular signed by Angela Sere-Ejembi, the CBN’s director of financial markets.
With GTBank’s new forex product gaining momentum, it is expected that other banks will soon follow suit, reshaping the foreign exchange landscape and reducing dependence on the black market. The convenience and security offered by the internet banking solution have positioned GTBank as a pioneer in this space, leading the way for a more efficient and transparent forex market in Nigeria.