Egypt’s second biggest state lender, Banque Misr has decided to suspend use of its credit and debit cards abroad, the bank’s chairman Mohamed Eletreby said Monday.
In comments on a talk show aired by local television channel CBC, Eletreby also said that those cards would only be used within Egypt, to avoid manipulation and to rationalise the use of dollars abroad due to the country’s currency exchange crisis.
Banque Misr will put strict limits on the use of credit cards abroad in a step aimed to prevent acquiring large quantities of foreign currency while individuals abroad, the banking official added.
Egypt has suffered from a shortage of dollars in the banking system that has sapped its ability to import since a 2011 uprising drove away tourists and foreign investors, both crucial sources of hard currency.
Some individuals tend to grossly misuse cards; in one month around $10 million were withdrawn through cards, Eletreby said.
Banque Misr’s move follows similar measures taken by a number of other banks a month earlier. Crédit Agricole Egypt announced in September that it was suspending use of debit and credit cards abroad as well as all international online transactions for all card types.
Emirates NBD Egypt on July 19th told customers that it would suspend use of Egyptian credit and debit cards abroad entirely, but later rowed back on the decision and said it would set new limits instead.
In addition, Commercial International Bank (CIB), Egypt’s largest listed bank, also told customers on July 27th it was reducing the amount of foreign currency customers can spend and withdraw when using their debit and credit cards abroad.
In June, Egypt’s central bank wrote to bank chiefs asking that they “ensure that debit cards, including pre-paid cards, issued in local currency by Egyptian banks are only used within the country.”
The central bank later said the letter was not intended to signal a blanket ban on card use, but instead a request that banks prevent individuals from misusing debit cards to acquire large quantities of foreign currency while abroad.