BML Reverses Decision to Suspend USD Transactions Amid Public Backlash

The Bank of Maldives (BML) has reversed its decision to suspend foreign transactions on cards linked to Maldivian Rufiyaa (MVR) accounts following widespread public outcry. 

The initial move, which was implemented this morning, was met with strong opposition, particularly from Maldivian students studying abroad.

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In its first announcement, BML introduced significant changes to its card limits for foreign transactions. This included the suspension of foreign transactions for both existing and new debit and credit cards linked to MVR accounts, as well as a reduction in the monthly limit for standard and gold credit cards to USD 100.

However, in a subsequent notice issued later in the afternoon, BML revealed that it had rescinded these changes, following instructions from the Maldives Monetary Authority, the country’s central bank.

“Changes to card limits for foreign transactions announced on 25th August 2024 have been reversed based on instructions from our regulator, the Maldives Monetary Authority,” the notice read.

The initial decision had sparked widespread criticism, particularly from Maldivian students enrolled in universities overseas. BML had previously justified the changes by citing the disparity between the high usage of foreign currency on cards and the bank’s ability to acquire sufficient foreign currency to meet this demand. The bank argued that this imbalance hindered its capacity to provide adequate foreign currency support to its business customers.

BML’s CEO and Managing Director, Karl Stumke, noted that while the bank had purchased approximately USD 60 million in foreign currency from customers this year, the usage of foreign currency on cards was three times higher.

Following the reversal, the limit for foreign transactions on debit and credit cards has returned to USD 250 per month, with a higher limit of USD 750 for Maldivians residing overseas.

The initial imposition of limits on foreign transactions was introduced in response to a USD shortage during the economic downturn caused by the Covid-19 pandemic. During his 2023 presidential campaign, President Dr Mohamed Muizzu pledged to lift these restrictions. 

While his administration announced in January that the limit for Maldivian students overseas would be raised from USD 750 to USD 1,200, the change was not implemented by the February deadline.

The recent changes to BML’s card limits came shortly after the Privatization and Corporatization Board (PCB) issued a letter to the bank’s Deputy CEO, Aishath Nooraddin, informing her of the decision to dismiss her from the bank’s board. Nooraddin has served at BML for over 42 years. However, the dismissal of board members requires approval from the bank’s shareholders.