Despite an increase in users shifting to cashless transactions, Sri Lanka banks are facing a shortage of new ATM cards as its suppliers cannot import plastic resin cards owing to the present dollar crisis at present, several General Managers of banks disclosed.
Some of the local banks have suspended the issuance of new credit and debit cards or renewal of the ATM cards on expiry, pushing account holders into difficulty since a couple of months ago.
Under this circumstance, these account holders had to vist banks for their financial transactions, spending their valuable time in bank counters.
State owned banks are facing more shortages compared to commercial banks. There is also a shortage of SIM cards powered by chips. The chips are mainly imported from China.
It is learned that several branches of banks have started to run out of stock .There are also several complaints lodged against those suppliers, who have increased the price for cards supplied to banks by taking advantage of the current situation.
Driven by significant chip shortages, hundreds of payment cards are at risk of not being issued over several months,a senior banker said.
It has been well documented that the entire semiconductor industry is currently going through a high level of uncertainty as demand for chips continues to far exceed all expectations across all industry segments.
Supply cannot currently keep up with increasing demand and the payment cards industry is by no means immune from this situation.
Local banks have raised concerns on the usage of debit and credit cards for foreign currency transactions due to the current volatility in the market, and have started taking on their own a set of measures to minimise the hit on the sector.
Sri Lanka Bank’s Association (SLBA) said that individual banks have taken necessary measures to limit foreign currency transactions via debit and credit cards.
“No common decision has been made but there were concerns raised with regard to debit and credit card transactions overseas.
This was due to the recovery process and billing issues among other areas of concern,” said a SLBA high official.
He pointed out that banks are concerned with the usage of debit and credit cards for overseas transactions largely due to two reasons.
The first is the issue with electronic fund transfer facilitator Visa. As it pays the rates as per rates published by the Central Bank of Sri Lanka (CBSL), the difference in rates that prevailed in the market some time ago created an issue for banks.
Now it is back to normal but earlier when Visa settles to the bank with the CBSL published rate, we had to settle at a different rate from the customers which was creating a problem for us,” he explained.
The second is that due to import restrictions, banks are watchful and want to ensure that the cards are not used for unacceptable foreign currency transactions.
Furthermore, he stated that a collective decision on settling limits would depend on the value and volume of foreign currency transactions happening through the cards.
“Cyber threats and other factors are also being considered at the moment but it depends on the extent of the transaction,” he added.
He asserted that although banks are exercising caution, no limitations would be imposed on transactions made by education, hospital, airline, insurance, and hotel merchants.
He also pointed out that as several media reports highlighted that banks were charging an additional fee for foreign currency transactions, banks have held active discussions in that regard and are exploring avenues to best manage the situation.
