Banks operating in Egypt halt foreign currency transactions with pound debit cards abroad

CAIRO - 9 October 2023: Many Egyptians have been receiving text messages from various banks operating in Egypt over the past two days, informing them of the suspension of using Egyptian pound debit cards abroad.

 

This comes in line with the worsening currency shortage in the country and to stop the drain of foreign currencies.

 

The Debit Card is one of the types of credit cards provided by banks for conducting financial transactions for those with accounts in the local currency, whether it is a savings account or a current account. Holders of the Direct Debit Card are granted various privileges, such as discounts and exclusive offers from famous stores, airlines, and more.

 

Among them, the Commercial International Bank (CIB) sent a text message to its customers explaining that starting from tomorrow, Tuesday, Oct. 10, transactions in foreign currencies will be suspended when using Direct Debit Cards issued on accounts in pounds, and the use of the Direct Debit Card will be limited to transactions in pounds only, within Egypt.

 

The Arab African International Bank also decided to suspend international transactions on Direct Debit Cards for the bank's customers, with its use limited to within Egypt only.

 

Several other banks also sent messages announcing the decision to suspend the use of Debit Cards outside Egypt, including the Arab Bank and the Housing and Development Bank.

 

The heads of banks operating in Egypt confirmed the issuance of verbal instructions from the Central Bank of Egypt to the banks operating in the country to stop using "Direct Debit Cards" for customers abroad, with its use limited to within Egypt only, without specifying the time frame for implementing this directive, according to Asharq Business with Bloomberg.

 

This decision comes at a time when Egypt is facing difficulties in providing hard currency, and banks are struggling to provide currency to their customers. In addition, the Central Bank of Egypt (CBE) has identified the misuse of debit cards outside the country.

 

Egypt is experiencing a severe crisis in the US dollar, which has led to drastic decisions such as the application of documentary credits for imports and a gradual reduction of withdrawal limits for individuals outside the country, as well as the imposition of a management fee estimated at 10 percent of the value of the required foreign currency, whether for importers or individuals. This has led to the growth of a parallel market for foreign currencies, with the US dollar at the forefront, and a significant shortage of greenbacks.

 

At the end of May 2022, the CBE announced the suspension of the use of prepaid cards outside Egypt, and most holders of these cards do not have bank accounts. The number of these cards in Egypt is estimated at about 25 million cards.