Rambally: Bank's cut in forex, peril for SME sector

REPUBLIC Bank Ltd (RBL) advisory that it is reducing by half, the maximum US dollar spending limit per billing cycle on customer’s credit cards, effective September 21, spells financial peril to the SME sector.

Chaguanas West MP Dinesh Rambally said the reduction from US$10,000 to US$5,000 will have a profound and negative effect on hundreds of SME’s.

On Saturday, Rambally expressed concern on the silence of both the Minister of Finance Colm Imbert and Central Bank Governor Dr Alvin Hilaire on the issue.

While the bank did not give a reason for its decision, it said the change will include all transactions outside of TT, as well as, all international online transactions, including transaction where the TT dollar is the billing currency.

The bank also said the limit on its pre-paid VTM card would be adjusted downwards effective October 1, will be reduced from US$5,000 to US$3,000 while online VTM loads would be reduced from US$1,000 to US$500.

Rambally said: “These SMEs are the backbone of the spectacular and continuous growth and development of Chaguanas, which has become the business capital of TT.

“RBL’s actions are part of a recent pattern which has seen other banks making similar reductions to the access of USD transactions.”

“They (SMEs) now face the grave prospect of having their entire businesses destroyed by this unanimous decision taken by RBL, which has a monopoly position in the country’s foreign exchange market, since it receives the largest share of the Central Bank’s sales of forex to banks.”

For the past eight years, he said, “businesses in Chaguanas West have faced numerous challenges such as late payment of VAT refunds, lack of access to sufficient forex, nuisance taxes and especially soaring crime, all of which have increased their operating costs.