(Trinidad Guardian) 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.
