BML's actions against President's instructions: Govt

The Bank of Maldives' (BML) decision, on Sunday limiting foreign transactions, was made against the instructions of President Dr. Mohamed Muizzu, the government said.

As per the board of directors' decision last week, BML on Sunday morning, announced suspending foreign transactions on existing and new debit cards as well as new credit cards linked to MVR primary accounts.

Additionally, the bank limited foreign transactions existing on Standard and Gold credit cards to USD 100.

The bank however, reverted the decision on the same day's afternoon.

At the government's press conference on Sunday afternoon, Minister of Economic Development and Trade Mohamed Saeed, said the bank's initial decision contradicted President Muizzu's instructions.

While detailing this, Minister of Foreign Affairs Moosa Zameer said the government and BML held earlier discussions regarding US dollar constraints, and said the bank's decision went against the explicit instructions of President Muizzu.

"The government has interest and stake in solving the bank's issues since it is the majority shareholder of BML," Zameer added.

Zameer added the government held discussions after the bank's initial decision on Sunday, and resolved the issue.

Attorney General Ahmed Usham confirmed both the bank and the Economic Council held discussions related to dollar constraints.

"But this decision does not reflect the terms agreed during those discussions," Usham said, adding that the government stepped in along with the Maldives Monetary Authority (MMA) for discussions with BML to solve the matter.

He added the issue was resolved following assurances extended by the centrla bank.

BML added it made the decision since the card usage was higher than the bank's US dollar purchases.

BML CEO and Managing Director, Karl Stumke said the bank purchased approximately USD 60 million in foreign currency from customers, but the card usage is "threefold higher" than this figure.

"... and we have this anomaly where the bank provides 75% less foreign currency to the economic sector than we do for discretionary spend on cards dominated by travel and online shopping," Stumke added.

Although the bank made the announcement on Sunday morning, it reverted the decision, citing it was based on MMA's intructions.