The Bank of Maldives (BML) on Sunday announced changes to its card limits for foreign transactions.
The changes, effective immediately, are in response to the escalating usage of foreign currency spend on cards and the static sale of foreign currency to the bank, BML said in a statement.
The changes announced are as follows:
- Existing debit cards: suspension of allowance for foreign transactions for cards linked to MVR accounts
- New debit and credit cards: suspension of allowance for foreign transactions for cards linked to MVR accounts
- Existing Standard and Gold credit cards: monthly limit for foreign transactions reduced to USD 100
Speaking about this decision, the bank’s CEO and Managing Director, Karl Stumke said, “The bank has been monitoring card usage over the past year, and I have reiterated in numerous speeches and interviews that the bank can only sell what it has been able to purchase.”
He also noted that the bank has purchased approximately USD 60 million in foreign currency from its customers, but the card usage is threefold higher than this amount. Stumke added that card usage impacts the bank’s ability to provide foreign currency support to business customers.
Stumke further noted that the bank observes an anomaly “where the bank provides 75% less foreign currency to the economic sector than we do for discretionary spend on cards dominated by travel and online shopping.”
He added the bank has to get the “mix correct” to ensure they are not squandering a scarce resource.
While noting BML’s obligation to protect its depositors, Stumke said the bank cannot continue to sell “more than we are able to purchase.”
“Customers using their USD credit cards and/or debit cards linked to USD accounts are unaffected and are free to use up to the available account balance. Customers that have recurring international payments are recommended to have USD accounts as their debit cards’ primary accounts to process overseas purchases,” Stumke said.
He further noted that this change would significantly impact the bank’s customers, and added the change is expected to be temporary. Stumke promised the bank will be reviewing the situation from “time to time” and keep customers informed of any changes.
“We have not taken this decision lightly but have been compelled to take action to ensure we can continue to provide the necessary support for essential economic activities,” Stumke said.