Dollar Transfer To Money Exchange Takes Longer Than Before
Category: Kuwait
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If you are accustomed to making international transfers in dollars, through a local money exchange company, whether for your personal needs, or for your family in your country, for the education of your children, or for investment and savings purposes, you must know that international transfers are no longer as comfortable and hassle-free as before, reports Al-Rai daily.

The money exchange firms in Kuwait have recently received several complaints from their clients, citing delay in their dollar transfers covering almost all countries were money was transferred. After the exchange company checked with the local intermediary bank in the respective countries to check on the delay its payments, the response was change in the procedures by one of the world’s largest correspondent banks, regarding the timing of its implementation of international payments transferred through it.

Responsible sources told the daily, according to the new procedures, it may take between 15 to 30 days for dollar transfers from Kuwait made through an exchange company which would normally take about 3 days, which now takes 9 times longer. This includes all customers, whether the remitter is a citizen or a resident. However, the banks remain unaffected and the transfers are made between one and 3 days.

According to the sources, the correspondent bank said what delayed the completion of the dollar transfers as reported by local exchange companies that the new instructions come with diligent procedures globally to absorb liquidity risks, especially those that move internationally through exchange companies, unlike banks that have broader and more accurate care directives about the data of the remitter.

The sources pointed out that the correspondent World Bank clarified that the long period helps it to verify the identity of clients and ensure their international financial activities, and that it will not go to individuals or entities included in the lists of sanctions or exclusion, which prevents the use of its network for the purposes of money laundering and terrorist financing. The bank stated that the new instructions apply to all international dollar transfers, without setting a minimum or maximum limit.

The new implementation period includes any person or entity, whether the beneficiary is another party, or even the remittance account itself, as long as the amount transferred in dollars. The unexpected correspondent bank action has created confusion at the local exchange firms, which are now in direct confrontation with the transferees, on the pretext that they did not warn them that the period of payment of their dollar transfers would be 10 times longer than before when conducting their currently suspended operations.

Hence, exchange firms fear that they will be subject to prosecution by their angry clients, and they are preparing to face another challenge. Because of the new complications imposed on them, they will face a broader activity from banks towards remittances, as they will try to take advantage of the weak ability of exchange companies to maintain their customer base of owners of dollar transfers, especially those who may not in the future be able to wait a month to carry out their dollar payments, which usually include transfers for the purpose of investment, for treatment, for tourism, for education, and for other purposes that are usually associated with a specific period, built around days, not months.
Faced with this, local banks may get an opportunity to fully control the market, and get rid of money exchanges, who according to the banks are unproductive, in terms of low returns, as well as in terms of attracting a wide segment of customers, and here the banks have a more favorable opportunity to increase their client base from dollar transfers.

Meanwhile, according to reliable sources, local exchange companies are looking for other international non-strict intermediary banks to carry out their international clients’ transfers, but they also face a major challenge in the fact that their bank is the most widespread correspondent in the international dollar transfer network, thanks to the contracting of most regional and local banks because that narrows the margin of contracting with another correspondent bank that enjoys the same network internationally, and enjoys flexibility in the period of implementation of international payments, and if that happens then the matter needs to be reviewed to bring about a fundamental change in the global network of correspondent banks locally.\

 

SOURCE : ARABTIMES

17 Feb, 2020 0 110
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