Banking expert Mohamed Abdel-al explained that the Central Bank of Egypt’s decision to activate the maximum credit limit granted to the credit card for use abroad reflects the CBE and the banking sector’s interest to reduce the consumption of foreign exchange for non-strategic or unjustified purposes.
The CBE said on Tuesday that there are those who misuse cards by making cash withdrawals from abroad without actually traveling.
It decided to activate the maximum credit limit granted to the credit card for use abroad as soon as the customer contacts the customer service center of the card-issuing bank, and notifies them of their travel abroad.
When the issuing bank receives a notification from the customer to activate the credit limit, there will be a maximum monthly limit for using the card according to what each bank decides.
Abdel-Al explained that the decision comes to eliminate all attempts by some direct debit card holders to misuse cards, and prevent the use of these cards as a means of trading in foreign exchange.
This decision is limited to direct debit cards only linked to customers’ accounts in Egyptian pounds, he said, whether for cash withdrawals from ATMs abroad or purchases from commercial stores, via POS devices or electronic commerce ET.
Abdel-Al said that this decision does not extend to currently continuing to allow the use of credit cards, for which Egyptian banks have previously set strict controls which include setting maximum limits for cash withdrawals, and increasing the percentage of fees and commissions imposed on them to prevent them from being exploited.
In a previous proactive step, banks had banned the use of prepaid cards (which are given to customers without opening an account) for the purposes of cash withdrawal in foreign currencies, he noted.
The banking expert also explained that this decision comes in response to the new and severe geopolitical situation in the region, and the economic pressures that Egypt is currently facing, especially from the International Monetary Fund and credit rating agencies.
Abdel-Al said that the decision also represents an indirect message to those interested in Egyptian affairs, locally and externally, that Egypt does not have the luxury of depleting or leaking any amount of foreign exchange for non-strategic purposes.