Cuba’s Central Bank Prohibits Private Businesses from Withdrawing Cash from ATMs

ATM at the Banco Metropolitano branch located in Belascoaín and Zanja, Centro Habana. (14ymedio)

14ymedio bigger14ymedio, Havana, August 2, 2023 — The “bankification” of the country, just approved this Monday by the Council of Ministers, reflects the lack of liquidity of the Cuban State, and will begin to take effect as of this Thursday, “gradually,” with the announcement of a group of measures by the Central Bank of Cuba (BCC).

From now on, said Alberto Quiñones Betancourt, vice president of the institution, in statements reported by the official press, “all collection and payment relationships between economic actors must be based on the payment methods established by the BCC, prioritizing electronic channels.”

Among the measures, which will also be published this Wednesday in the Official Gazette, is the prohibition on “economic actors” — that is, private companies — withdrawing money from their fiscal account. For these companies the daily maximum allowed in each banking operation is 5,000 pesos.

Only cards “associated with pensions, savings accounts, salaries, bonuses, etc.” may be used at ATMs, that is, from natural persons.

In addition, the obligation is established that all businesses that provide goods and services have “electronic means of payment” and that private companies have contracted “the services of the payment gateways or POS.”

One of the premises of the new measures, they concede, is “to encourage the use of bonuses.” For example, this Wednesday, before the BCC issued its statement, the telecommunications monopoly, ETECSA, announced a 10% savings “by paying for telecommunications services through Transfermóvil.”

Similarly, this Tuesday, the state corporation Cimex reported that from September 1 to October 31, it will “gradually” eliminate cash payments at gas stations in the country.

Quiñones Betancourt, without referring to either the scarcity of cash or the size of the underground economy, limited himself to saying that “this process of progress and duality is determined by the experiences accumulated in Cuba and from the existence of a group of conditions that allow progress.”

“These channels allow for safer, faster operations, and it is important that they provide an economic benefit for the population,” insisted the vice president of the BCC, who did not mention the lack of connectivity, the frequent power cuts that prevent the terminals from operating at all, and something getting more and more under the skin of Cubans: the rejection of having their movements controlled.

Although the official assures that they are “accelerating a process adhering to international standards, since electronic payments are a daily part of the lives of the citizens of any country,” what Cubans fear is that this will mean the freezing of their accounts.

Before the Council of Ministers on Monday, in recent weeks, there have been numerous testimonies received by 14ymedio from citizens who have not been able to collect transfers in foreign currency. For this, the usual system is to make a “cash reserve” with the bank branch, which involves signing up for a list and being called when the money is available.

A retiree from Centro Habana has been trying for two weeks to collect what her son sends her from Madrid and, in response, her bank repeats that they “do not have” euros. Another resident of the Havana municipality of Playa, with two children in Italy, was told that “this option” is “on hold until further notice.”

A resident of Varadero, Matanzas, tells this newspaper in detail that when he went to withdraw money from his account in euros at the Banco Popular de Ahorro, the employees told him that “they were not allowing cash to be withdrawn from the foreign currency accounts, not even for ’reserve balances’.”

When asking for explanations, the staff assured him that “it was not a problem of availability, that there were euros in the bank,” that it was “a general measure of the Central Bank that prevents foreign currency from being extracted in cash from the accounts.”

“The conclusion I draw is: despite having money, they are not going to give it to me,” laments the man from Matanzas. “Of course I was very upset with this situation, since that money is mine. It has arrived from abroad as a remittance. I have not invented it from the air. What I receive in that account is euros, and on my MLC [‘freely convertible currency’] cards* I receive dollars from abroad.”

The worst thing for him is that he can only withdraw from that account at the Varadero branch itself and cannot use it to buy at the stores that only take payment in MLC, that is in foreign hard currencies. “The only way I have to withdraw from that account is at that branch, so if they don’t let me withdraw it, then they have kidnapped my money,” denounces the man. “This is a robbery, without a doubt, they do not want the people to get their money.”

*Translator’s note: The ‘fine points’ of currencies in Cuba are too complex (and ever changing) for this footnote. Briefly, however, an entire network of state-run businesses in Cuba only take payment in ‘MLC‘  (moneda libremente convertible),  ‘freely convertible currency’. This foreign currency comes to Cubans as remittances from abroad, which they can collect at cadecas — currency exchanges. However, Cubans do not collect paper dollars or euros; they can only collect it in the form of debit cards, and the balances on the debit cards can only be ‘spent’ at the MLC stores. In addition, unspent balances cannot be recovered or converted into Cuban pesos.  In this way the Cuban state takes control of all the remittances sent from abroad, keeping the balances until they are spent, and assuring that when they are spent they are only spent in State-run businesses.


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