Naifaru Court has ordered the Bank of Maldives (BML)’s Naifaru Branch to issue an amount of dollars requested by the ‘Naifaru Juvenile’ NGO, after it sued the bank for declining to issue dollars because the NGO had deposited dollar cheques rather than physical cash.
Naifaru Court Judge Abdul Muhusin delivered the verdict yesterday and said that there was no legal grounds for the Bank of Maldives to withhold the money, and that all the dollars saved in the bank under Naifaru Juvenile’s name belonged to the NGO.
The judge also ruled that the bank had no authority to change the money into another currency when the owner requested it to be kept in the specific currency that the owner had deposited.
The money saved in Naifaru Juvenile’s account was money aid money from foreign parties to conduct different activities under agreements it had made, and if the money was not released, the foreign parties aiding the NGO might lose confidence in it, the judge said.
The judge also noted that its inability to draw on its funds could potentially lead to the NGO losing future agreements and aid from foreign parties.
BML and other banks in the Maldives are currently facing an ongoing major dollar shortage and have limited the amount of dollars they issue each day.
While the official exchange rate has been floated within 20 percent of the pegged rate of Rf12.85, it has sat for much of the year at the upper bracket of Rf15.42. The exchange rate on the black market is up to Rf20.
While dollars pour into the Maldives’ profitable tourism sector, much of this is swiftly banked overseas and little enters the local economy. The Maldives Monetary Authority (MMA) has never enforced regulations requiring use of the local currency and most tourism businesses continue to charge tourists in US dollars, greatly limiting demand for rufiya.