Bank of Maldives Plc Ltd, the state owned bank, has issued a statement informing its customers that expatriates and foreigners with a BML Visa Electron debit card linked to local Maldivian Rufiyaa account will not be able to use their visa debit cards overseas from November 1st, 2010. No transactions can be made with the Visa Electron debit card outside of Maldivies, either on an ATM or at a POS terminal.
The statement goes on to say that Maldivians who has already been issued with a Visa debit card can continue using the debit card worldwide, with a controlled spending limit of US Dollar 600/- daily, until their cards expire. New cards will only be issued against a US Dollar account, even for Maldivians.
In short, if you want to use your old Visa or apply for a new Visa debit card, you should have a US Dollar account with BML, and sufficient funds in your US Dollar account.
Bank of Maldives says it was a necessary decision to survive the US Dollar crisis. It seems that the Bank just does not have enough foreign currency to settle foreign bank charges for increasing debit card transactions abroad.
Bank is having tough time, that is understandable, by why did BML issue this statement in local language Dhivehi, when almost all banking communications and services are in English? Especially when this decision affects expatriates and foreigners more than locals? Weird.
Everyone traveling to mecca this season for Hajj bought US Dollars in the black market for a highly inflated rate because the banks in Maldives could not keep up with the demand. Everyone who is traveling abroad for the year end holidays will have to do the same. Thousands of students abroad are going to feel the pinch as well.
Black market for US dollars has been expanding at an alarming rate for the past months, and this decision by the bank will make the market explode. Maldives is a small country, she is not self-sufficient, and depends heavily (exclusively?) on foreign imports. This US Dollar shortage will further strain the relationship businesses have with Bank of Maldives, will take it toll on the business relation locals have foreign parties, and it will definitely drive up the prices of almost everything.
This decision by bank will not go down easily with the general public, not to mention the uproar in the business community. Some say this is the worst years in the Bank's history.
So what is the solution?
The short answer would be to simply find another bank. There are other banks in the country, where you can apply for a Visa credit or debit card, so switching banks does make sense. The problem is Bank of Maldives is the largest bank in the country, it is well established, its operation is wide, and they have a branches across the nation. The other banks cater mostly to a niche, and specialize in corporate banking. Visa may be by far the most commonly used debit card around, but there are other alternatives. MasterCard? Maestro?
If you must have a Visa card, I am sure there will foreign banks which can offer Visa cards to us Maldivians. The procedure may be a little disheartening, but you can get it.
Long term solution? I do know now enough to comment on the countries monetary policies. But I would like to hear your thoughts on this.
I have one question, this may sound stupid, but if US Dollar is on a decline and at an all time low, why is it becoming increasingly hard to buy it? Are people abandoning US Dollar and starting to trade in other currencies? That would be bad for us Maldivians, since in this country, foreign currency is synonymous with US Dollar.