Doubts and Confusion after Cuban Regime Announces New Bank Regulation
It was 10:00 AM and people in line for the ATM at the Banco Metropolitano branch on Infanta and San José streets in Central Havana were growing impatient. Their concern was not over the measure announced on Wednesday that prohibits businesses from withdrawing money in this way, but rather something much more mundane: The machine was not working because there was no electricity.
It was announced in a special edition of the Official Gazette that the number of pesos a business would be allowed to withdraw from a bank on any given day — at a teller window no less — would be limited to 5,000. The news generated a wave of reactions on social media.
“You cannot withdraw more than 5,000 pesos,” explained an employee of the bank, outside of which people were still waiting because, though the lights had come back on, the ATM still had to be brought up to speed. A few blocks away at the branch on Belascoaín and San Martín streets, the situation was completely different. “We don’t have change at the moment,” an employee explained to this reporter.
A little later, at the corner of Belascoaín and Zanja, there was yet another response. “The changes take effect thirty days after publication of the measure in the Gazette,” claimed an employee. Confusion is the overriding reaction among those responsible for putting the Central Bank of Cuba’s resolution into effect. According to language in the official bulletin, the measure takes effect “three days after its publication.” In other words, on August 5.
Upon reading the actual regulation, the situation becomes clearer. The resolution limits “economic actors” — this includes individuals engaged in commercial activities — to 5,000 pesos a day in cash transactions. Any exchange that exceeds that number must be executed through a bank, specifically by electronic transfer.
The current maximum amount is 2,500 pesos, a limit set in December 2021. Cuban economist Elías Amor states that this latest move is, in his opinion, a reflection of “the monetary expansion produced on the Island by the runaway inflation,” noting that the new figure is no more and no less than double the amount approved just two years ago.
There are, of course, exceptions. If you have a bank account — the goal of the measure is to encourage this — and you need more cash to pay salaries and other compensation to workers, subsidies, Social Security benefits, alimony or to make advance payments, you may submit a request.
However, the goal is clearly for companies to be able to guarantee “their customers access and use of electronic payment channels for the acquisition of goods and the rendering of services”, as well as to pay taxes through those same means. However, it is obvious that the long-awaited “bankification” that the regime wants to carry out like a forced march lacks the telecommunications infrastructure necessary to carry it out.
The more than 340 comments on the government-run news website Cubadebate are evidence that this is one of the public’s most pressing concerns, even among those who support government control over private companies’ bank accounts. “We are not prepared for this step towards modernity,” the author of one post states bluntly. Dozens of others complain about broken or non-working of point-of-sale terminals. “So far, I have not seen or heard of a QR code at any neighborhood store and nobody has reported anything,” laments a man from Las Tunas.
The regulation provides a 30-day period for companies, in agreement with banking entities, to establish a schedule not to exceed six months for “incorporation into the banking program.” There are persistent doubts, however, that this is technically possible. “I tried to make a digital payment at a neighborhood store (in my district) that has its QR code visible but not readily accessible and it was impossible. Not even the store employees know how it works. I was in another industrial products store and at no point was the POS available. They almost never have a connection with the notary’s office,” writes one user.
Another controversial aspect of the new measure is that it prohibits cash withdrawals from ATMs. This applies to all business entities but, since state companies do not make this kind of withdrawal anyway, the only economic actors it affects are those in the private sector. Henceforth, private businesspeople will be forced to compete with the public for a place in line at the teller window, a situation that is aggravated by the fact that there are deadlines to deal with.
Employers can withdraw money to pay salaries and Social Security benefits no more than three days before payment is to be made. If they have not paid their employees within seven days, they are obliged to return the money the next business day.
“What can we expect from this sudden jolt by the regime to the private sector? Well, many businesses, especially the smallest and those least able to meet these demands, can still opt for the informal approach,” warns Elías Amor in his analysis of the measure.
On Facebook, which serves as forum for the owners of small and medium-sized businesses in Cuba, there is a tense calm. Doubts remain and people are on edge as they await more information.
Once back at the 14ymedio newsroom, it was learned that the ATM at the Belascoaín and San José branch had suffered a breakdown. The bank now had a hose stuck in the middle of the front door and its director was asking people to leave. A tanker truck had stopped at the door and was operating a thick drainage pipe. One more day that customers were left without their pesos.