Abdul Gahfoor: MMA involved in creation of Maldives’ USD black market

Hanimaadhoo MP Abdul Ghafoor Moosa, on Tuesday, has alleged that the US Dollar black market in the Maldives was created with central bank, Maldives Monetary Authority (MMA)’s involvement.

While debating on the amendment submitted to the National Payment System Act on Tuesday, Abdul Ghafoor said the amendment would allow MMA to form companies and engage in business activities. He underscored MMA as the regulator of Maldives’ financial system.

He alleged that the USD black market in the Maldives was created with the central bank’s involvement.

“Honorable Speaker, the USD rate in this country currently stands at MVR 20.25. Honorable Speaker, this is a black market created with the participation of the central bank. I am saying this because no action has been taken against anyone to date,” he said.  

Abdul Ghafoor backed his allegations against MMA, citing lack of action as expatriates continue to sell USD in violation of the stipulated laws and regulations. He further cited lack of action when a large sum of money flowed out of the country through the GEMCUE Investment Scheme (GMCE), a pyramid scheme to which thousands of Maldivians have reportedly lost millions.

Abdul Ghafoor also criticized the national bank, Bank of Maldives (BML), maintaining its loan interest rates at 15 percent despite its profit standing at a billion.

The government-backed amendment to the 'National Payment System Act' sponsored by PNC MP Adam Shafeeq on behalf of the government is aimed at empowering MMA to establish companies and other legal entities for the operation of payment systems and the provision of payment services. Furthermore, it seeks to introduce necessary legal amendments to prohibit the solicitation of payment services and to integrate regulations concerning the imposition of penalties.

The amendment outlines the following powers of the MMA:

• Ownership, establishment, and operation of systems, or participation in their ownership and operation.
• Opening and maintaining accounts for operators and participants for the clearing and settlement of transfers within these systems.
• The placement of collateral by operators and participants.
• The provision of intraday liquidity to participants, contingent upon the receipt of sufficient collateral.

Concurrently, a company or joint venture may be formed to operate a system and deliver payment services.

Specifically, the amendment to Article 50 of the Act clarifies that individuals exempted by the MMA are not permitted to offer payment services within the Maldives unless they possess a license or permission granted under the Act. Additionally, it stipulates that no payment service should be sought by an applicant or through any other entity, except for those explicitly exempted by the authority.

Solicitation is defined here as the offering of a payment service to the public, or the placement or invitation of such an advertisement.

As the provision currently stands, no person shall provide a payment service in the Maldives without obtaining a license or permission issued by the MMA.