The re­duc­tion of the US-dol­lar spend­ing lim­it on cred­it cards is­sued by lo­cal com­mer­cial banks con­tin­ues to be a ma­jor prob­lem as it is putting a sleep­er hold on lo­cal busi­ness­es and al­so forc­ing them to use sev­er­al cred­it cards to im­port goods.

Vice pres­i­dent of the Fyz­abad Cham­ber of Com­merce (FCC), An­tho­ny Da Cos­ta, who is the own­er of the con­struc­tion com­pa­ny, told the Sun­day Busi­ness Guardian that the sit­u­a­tion is be­com­ing un­ten­able.

Paint­ing a pic­ture from his own ex­pe­ri­ence, Da Cos­ta said his busi­ness card us­age on a month­ly ba­sis from a par­tic­u­lar com­mer­cial bank used to be US$11,000. That has now been re­duced to US$500.

He said he was nev­er giv­en no­ti­fi­ca­tion by the bank about this re­duc­tion.

“In Ju­ly, when I tried to make a pay­ment to a client in the Unit­ed States over US$200 came out, which is not half the pay­ment I had to make. I then went to the bank where they told me there was a re­duc­tion of US$500. How­ev­er, the bank teller is telling me I can sign up for pri­vate bank­ing and ac­cess US$10,000 a month and for­get about the busi­ness cred­it card but mind you the pay­ment on this card is $290 per month, $3,480 per year.

Da Cos­ta said when he reached out to his bank rep­re­sen­ta­tive in Ju­ly, he re­ceived a mes­sage say­ing, “Hel­lo Mr. Da Cos­ta, please be ad­vised that based on the forex re­stric­tions that we are faced with; all busi­ness cred­it cards were re­duced to US$500.”

He said if one’s cred­it card was US$5,000 or US$6,000, it is now US$3,000.

“When you do that, you are forc­ing the busi­ness­man now to com­min­gle, which is to take per­son­al funds and use them to do busi­ness trans­ac­tions, which is against Cen­tral Bank rules. It’s al­most like you’re try­ing to at­tack small busi­ness­es. Be­cause the man with the lit­tle com­put­er shop needs to buy their goods. They need US$5,000 or US$6,000 every month to bring in their goods to keep their store run­ning. I can tell you from a friend of mine, he need­ed US$15,000 to pur­chase some items for his store. He had to use sev­en dif­fer­ent cred­it cards from dif­fer­ent peo­ple to pay for his goods,” Da Cos­ta said.

Giv­ing an­oth­er ex­am­ple, he said his line of con­struc­tion in­volves seal­ing, paint­ing and tiling. His busi­ness bid for a project, and the quan­ti­ty of car­pet tiles that the client need­ed was not in stock in T&T.

“Un­for­tu­nate­ly, we didn’t get the job, so we didn’t have to go through the process with them. But these are some of the things that, in my in­dus­try, we may need to re­ly on for­eign ex­change to bring in, in or­der to get a project com­plet­ed,” the busi­ness­man said.

Da Cos­ta rec­om­mends that T&T in­tro­duce a dual cur­ren­cy regime, which he be­lieves can help ease the for­eign ex­change short­age.

Pana­ma, and Egypt have both cur­ren­cies run­ning, he said.

“I’ve been to Egypt. In Egypt, you could work in ei­ther the US dol­lar or you could work Egypt­ian pounds. A lot of coun­tries do it. But I don’t know.

I be­lieve if they al­low that to hap­pen in Trinidad. They would lose con­trol over it. Who could get US and who can­not get US; as far as I’m con­cerned? In the gov­ern­ment sec­tor, they may use this to stran­gle small busi­ness­es,” he sug­gest­ed.

In a no­tice to cus­tomers last Wednes­day, the lo­cal­ly list­ed, ma­jor­i­ty Cana­di­an-owned com­mer­cial bank in­di­cat­ed that the US dol­lar spend­ing lim­it on its Aero Mas­ter­card Black would be cut to US$5,000 a month. All oth­er per­son­al cards would see a re­duc­tion to US$2,000 per month. On Thurs­day, Sco­tia­bank wrote to its cus­tomers in­form­ing them of plans to in­crease an­nu­al cred­it card fees and in­ter­est rates.

“We are writ­ing to ad­vise of an up­com­ing in­crease in an­nu­al fees and in­ter­est rates on your cred­it card, which takes ef­fect on De­cem­ber 9, 2024. Af­ter hold­ing our prices steady for the past five years, in­fla­tion and in­creased op­er­at­ing costs as­so­ci­at­ed with im­prov­ing dig­i­tal plat­forms have reached to the point where price ad­just­ments are need­ed,” ac­cord­ing to the bank’s no­tice to its cus­tomers.

The de­ci­sion has drawn crit­i­cism from the pub­lic, with many tak­ing to so­cial me­dia to ex­press their dis­gust with it.

In Sep­tem­ber, Sco­tia­bank ad­vised its cus­tomers that it was re­duc­ing the dai­ly lim­it for over­seas point-of-sale (POS) trans­ac­tions and ATM with­drawals on the Sco­ti­ac­ard Visa Deb­it from US$100 to US$50. Ad­di­tion­al­ly, the month­ly for­eign ex­change lim­it on Sco­tia­bank deb­it cards was re­duced to US$1,200.

“We un­der­stand that this may be chal­leng­ing and thank you for your con­tin­ued un­der­stand­ing through­out these changes,” the bank stat­ed.

In Sep­tem­ber 2023, Re­pub­lic Bank ad­vised its cus­tomers that ef­fec­tive Sep­tem­ber 21, 2023, the US-dol­lar lim­it on its cred­it cards would be re­duced from US$10,000 to US$5,000 per cy­cle.

And on Ju­ly 19, 2024, RBC Roy­al Bank said it would cut its cred­it card hold­ers’ month­ly for­eign cur­ren­cy spend­ing lim­it by $10,000 (US$1,500), ef­fec­tive Sep­tem­ber 1.

In the bank’s no­tice to its cus­tomers, RBC said, “Per­son­al bank­ing and busi­ness bank­ing clients (ex­clud­ing pri­vate bank­ing) month­ly lim­its will be re­duced from TT$51,000 (US$7,500) to TT$41,000 (US$6,000) in forex equiv­a­lent to a max­i­mum of the ac­count’s cred­it lim­it, whichev­er is less.”

Speak­ing to Guardian me­dia last Wednes­day, Cen­tral Bank Gov­er­nor Dr. Alvin Hi­laire said there is an im­bal­ance in this coun­try’s for­eign ex­change mar­ket, but the bank is do­ing its best to meet the de­mands.

“What we have been do­ing to keep calm in the mar­ket is to sell ap­prox­i­mate­ly US$50 mil­lion every two weeks which is not triv­ial. This year we sold over US$1 bil­lion on the mar­ket.

“We al­so sup­ple­ment that by pro­vid­ing a liq­uid­i­ty guar­an­tee fa­cil­i­ty to the com­mer­cial banks. So, in oth­er words, when the banks are ex­tend­ing them­selves a lot in trad­ing, they can get a spe­cial amount, with­in the lim­its of the cen­tral bank. Last year, it was about US$92 mil­lion that banks got ex­tra in­ter­ven­tion from the Cen­tral Bank and this year so far it is about US$75 mil­lion. This year we have about US$ in in­ter­ven­tion. We are talk­ing about 100 mil­lion per month,” the gov­er­nor ex­plained.

Last Tues­day, Min­is­ter of Fi­nance, Colm Im­bert, in a news re­lease, said that the for­eign ex­change win­dow opened by the Ex­im Bank for whole­sale im­porters of ba­sic foods and phar­ma­ceu­ti­cals dur­ing the COVID-19 pan­dem­ic was a tem­po­rary ini­tia­tive.

Im­bert said, “The ad­di­tion of a sec­ond forex win­dow at the Ex­im Bank for es­sen­tial im­ports dur­ing the COVID-19 pan­dem­ic can­not cre­ate a sit­u­a­tion where, four years lat­er, the Gov­ern­ment is be­ing held li­able by cer­tain pri­vate sec­tor busi­ness­men for the items they or­dered and re­ceived with­out pay­ing for them.”