Central Bank Maldives Monetary Authority (MMA) has stated that the Bank of Maldives (BML) is financially sound, despite challenges in managing card payments.

BML announced earlier on Sunday that they will be discontinue dollar support for foreign transactions on all existing and new MVR debit cards, in addition to lowering the limit to USD 100 on MVR Standard and Gold Credit Cards. The MMA however asked the Bank to reverse the decision as the regulatory body of the Bank, following which BML announced that the limits have been reinstated as before.

Following this, the MMA said in a statement today that the authority met with BML on several occasions to find out the challenges faced in managing overseas transactions with BML cards. As such, they revealed that the Bank has noted a significant increase in the number of foreign currency card transactions for various purposes following the Covid-19 Pandemic.

The MMA said the banking system has increased its surplus liquidity due to the printing of money to manage the government's cash flow during the pandemic. The surplus liquidity in the banking system stood at an average of MVR 6.7 billion at the end of July.

MMA added that the majority of the surplus liquidity was disbursed by the Bank in the form of personal loans. The amount of personal loans disbursed by the Bank stood at MVR 2.9 billion at the end of 2019. However, the figure stood at MVR 6.6 billion at the end of June this year.

According to the MMA, this was the reason for the increase in card transactions during the period.

The statement also highlighted that MMA has sold USD 307 million to banks by the end of 2023, up from USD 267 million at the end of last 2022. This year, the amount has been increased, with a large portion of it allocated to BML, the MMA said.

The authority said it would give priority to banks that take into account public concerns in determining the proportion of dollars allocated to banks in the future.