Banks have begun taking measures to add restrictions on the use of dollars abroad by Egyptians, whether through cash or electronic payment cards.
One of the first banks to take these steps is the National Bank of Egypt (NBE), which decided last week to provide only $2,000 (or its equivalent) to travelling customers, instead of $3,000.
Moreover, it lowered the daily withdrawal cap for debit cards abroad to the equivalent of approximately EGP 1,600, compared to the equivalent of approximately EGP 8,000 prior.
In addition, the NBE increased the commission on withdrawing and purchasing through cards to 3.5%, compared to 2% previously.
The NBE’s measures came amid similar steps taken by other banks. The list includes the National Bank of Greece, Blom Bank Egypt, and the Arab African International Bank. Other banks are studying taking similar steps in order to alleviate demand on dollars, whether inside Egypt or abroad.
Banks took these measures after they found that some customers use their cards abroad in commercial operations, not for personal purposes, said the head of the Treasury at a foreign bank operating in Egypt, Tamer Youssef.
He added that, by tracking their purchase operations, it was found that these customers purchase the same goods from the same places several times, thereby indicating that they were using their cards for commercial purposes.
This contradicts the purpose of issuing the card, which is to cover personal expenses, said Youssef.
Two major factors govern the limits banks set for granting dollars or cash withdrawals: one is the dollar resources available at each bank, while the second is the application of the “know your customer” concept, according to Youssef.
He noted that banks are entitled to take such measures to limit dollar use, in light of the significant lack of foreign currency in Egypt. Moreover, there are parties more deserving of banks’ dollars, such as those importing basic and important commodities, added Youssef.