- ADIL NAJI
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Dubious currency Exchange Practices at Moroccan Banks: A Need for Reform
Washington / Morocco Board News Service - To transfer funds to Morocco from an American bank to pay for merchandise, buy an asset, start a business or help family members, the first words you will hear from the local bank clerk is that Morocco is on the A List of Slow-to-Pay Countries. It has always seemed bizarre that this is true.
Moreover, given the world economic crisis, Moroccan banks should provide a friendly business environment to the Moroccan Diaspora , and to foreign customers who bring in badly needed hard currency.
Sadly, experience with banks in Morocco shows the opposite.
Within this context, I am writing to bring up a point that I feel concerns anyone who does business with Morocco, and to hopefully start a process where an inequitable situation can be studied and rectified. Addressing these somewhat abusive banking practices would give greater dynamism to the economic potential of international trade with Morocco.
I am a long time customer with Attijari Wafa Bank, where all of my business transactions between the US and suppliers in Morocco take place. On August 10, 2010, I sent a wire transfer to my supplier in Morocco in US dollars. Normally, the recipient bank should exchange the funds with a value equal but not less than what is declared on its exchange chart for the day the funds reaches the sender's account..
On August 13, I was surprised to learn that the Attijari Wafa Bank credited me with the transfer in Dirhams with the exchange rate dated back to August 10. In other words, according to bank official documents, the Attijari Wafa Bank received the funds on August 13, yet they applied the exchange rate of three days BEFORE the money arrived into their account. The general manager promised to "investigate" the issue with headquarters in Casablanca; however, it has been over two weeks and no formal response was given.
According to the website of Morocco's central bank. Bank Al Maghreb, the dollar values had increased between August 10th and 13th, the dollar went up from 8.47 on August 10th to 8.54dh on the 11th, and it reached 8.63 on the 13th.
Attijari Wafa Bank purposefully applied a lower exchange rate than the one listed by the central bank, and they pocketed an extra 5000 dirhams form my hard earned money.
According to a World Bank report dated April 23, 2010, remittance (payments) from Moroccans residing in the United States to Morocco have remained flat for 2008, and Morocco continues to hold a place among the top 20 remittance recipients with six (6) billion dollars recorded in 2009 -- despite the US economic recession that started in 2008 and claimed many jobs of Moroccans living in the US.
Banks in Morocco usually hold international transfers from three (3) days to a week, and, in some cases, up to two weeks; that is the reason Morocco is classified as one of the slow to pay countries. To understand why, I conducted a survey on 45 wire transfers I recently sent to Morocco. Transfers leave the sending bank, arrive at an intermediary bank which then processes the wire transfer, and they then finally arrive at the receiving bank. The receiving bank will then decide when they are going to process the wire transfer.
When the US dollar value is stable, the bank (in my case Attijari Wafa Bank) holds the funds up to two weeks and more); however, when the dollar is unstable, they release it within three business days but they change it with the lowest value in these days .
It is seemingly unethical for banks in Morocco, like Attijari Wafa Bank, to manipulate funds sent to Morocco for their own profit, especially when the remittances of Moroccans living overseas represent 6.74 percent of the Moroccan $88.9 billion GDP .
For the past decade, the Moroccan government has been working to lead a transformation of its economy to achieve sustainable growth based on collaboration with the private sector, to accelerate economic activities to attract foreign investments, reach the goal of 10 million visitors per year, and build a structure to sustain its growth and protect foreign investments. Unfortunately, the banking system seems to be working only for its own benefit, without a strategic plan for the country; in fact, the economic reforms that were put in place in the mid 80's to facilitate the transition from a controlled economy to a liberalized economy driven by the participation of the private sector, especially the financial institutions, now represent a threat that may lead to a failure of the economic reform.
Clever bank advertisements with well dressed and smiling models in expensive suits and handshakes between bankers and customers will not cover for the routine practices described above. Such practices will need to change before "Morocco-is-open-for-business" claims can be taken seriously by foreign investors and Moroccans alike.
People that have experienced a similar situation with a Moroccan financial institution should work to expose it and stop the abuse. Greed and other misconduct within Moroccan banks are a threat to Moroccans abroad and to Morocco's economy. Perhaps we can start an exchange on this issue.
Adil Naji is a Moroccan American business person, who writes on current Issues.