Now RBC reduces forex limits on credit cards

ROYAL Bank of Canada (RBC) has announced a 66 per cent reduction in the foreign exchange (forex) limits on its personal and business banking credit cards.

In a notice issued on November 8, the bank said these changes will take effect from December 1.

Credit-card holders' monthly limits will be reduced from approximately $41,000 (US$6,020) to $14,000 (US$2,058).

The bank said it is committed to providing optimal choices for all its clients.

But, it said, "Given the ongoing foreign currency supply constraints, we need to regularly review forex limits on our clients’ credit cards, while striving to balance the needs of our clients with the availability of forex supplies.”

The bank said local TT dollar transactions remain unaffected.

The $41,000 (US$6,000) limit, or the account’s credit limit, whichever was less, went into effect only on September 1. RBC gave notice of that reduction in a notice on its website dated July 15. That previous limit was itself a cut from the equivalent of $51,000 (US$7,500).

In an e-mail sent to some customers on October 30, Scotiabank said it will reduce the US spending limit on its credit cards and stop the use of its Visa debit card for overseas transactions from December 1.

Last September, Republic Bank advised customers of changes to come into effect in that month. This involved the US-dollar limit on its credit cards being reduced from US$10,000 to $5,000 per cycle.

At a news conference on November 5, Finance Minister Colm Imbert said the ministry is engaging various chambers of commerce and the TT Manufacturers Association (TTMA) on whether or not the system by which forex is distributed should be changed.

He said the Central Bank, in distributing forex to local commercial banks, depends on them to adhere to an “honour system” in allocating US currency to customers.

“It is a system that has been in place for over 25 years, where it is expected that the banks would exercise responsibility, equity and justice in the distribution,” he said.

He said an alternative was to specify that percentages of this allocation should go to SMEs (small and medium enterprises), for medical expenses, education, travel or imports for manufacturers.