HAVANA, Jan. 25th. Four months after applying the so-called banking process in Cuba, which has involved the Government trying to eliminate cash transactions and the obligation for people and companies to use forms of electronic payment, as well as to have a bank account, the Authorities recognize that its impact has not been what was expected.
According to a report on the results of the process shared by the Central Bank of Cuba (BCC) with the official site Cubadebate, “there are businesses that have payment channels and do not guarantee their clients access to them; there is resistance on the part of direct sellers belonging to state businesses, and there are providers of goods and services that lack the necessary technical conditions or are found in the so-called zones of silence”.
The note points out that although as of February all Cuban economic actors must have created the conditions to accept payments by electronic transfer, made between bank accounts, “many do not create the conditions or manage to evade the treasury.”
Apart from the resistance and rejection of the process, the BCC recognizes that part of the population also reproaches “for not having been consulted about how they wanted to acquire their salary (in cash or card); and complaints persist among clients who are unable to choose the method of payment in private or state establishments”.
Likewise, especially in the interior of the Island, the infrastructure is not adequate to implement the measure, since “non-state economic actors do not have a formal market where they can acquire foreign currency, which is why they continue to accumulate cash and demand payment in this way to their clients”.
“These actors do not stably deposit in the bank and there continues to be a poor perception of the services of bank branches, which do not yet respond to the real needs of natural and legal persons,” the note adds.
According to the BCC report, although electronic transactions grew in Cuba during the pandemic, especially with the state payment gateways Transfermóvil and EnZona, in 2023 the increase stopped. Cubadebate assures that “since Resolution 111/2023 was approved, cash extraction operations have decreased.
At the same time, there has been progress in the use of electronic payment means and channels, concluding the month of December with a 21.10 % more in relation to September”.
However, “these increases do not correspond to the increase in the number of entities that have contracted the services of the gateways, which has been 30% since September,” warned the minister-president of the BCC, Joaquín Alonso Vázquez, when speaking last December before the National Assembly of People’s Power (ANPP).
At the end of 2023, the report indicates, “operations in accounts associated with payment cards that do not involve cash represented 68.30%, a figure higher by 4.94 percentage points at the end of 2022.”
Alonso Vázquez pointed out that the quality of service in the Banking and Financial System was evaluated as poor in 2023. In these establishments, he said, there is an “increase in the demand for national and foreign currency much higher than previous years and the capacities of several branches “.
And although, in the face of constant complaints from the population about the huge queues at banks, the authorities decided to reserve ATMs exclusively for people, “the service continues to be critical, which is influenced by the low availability of cash, the frequent lack of electrical energy and the technical state of these”.
The Cuban banking system has 800 ATMs, most of them with a “high degree of deterioration, and their availability to dispense cash does not exceed 75% on average. The provinces most affected are Santiago de Cuba, Guantánamo and Matanzas,” he adds. The report.
Banks are also in trouble for another reason: labor fluctuations, which mainly affect establishments in Havana.
And the BCC recognizes: “In this context, the population, and especially a group of non-state actors, tend to retain cash in their possession. The phenomenon is related to the reduction of offers and the need to buy provisions on the market black”.
As predicted, the banking corralito associated with banking brought more pain than glory for entrepreneurs.
Workers at a branch of Banco Popular de Ahorro in Unión de Reyes, Matanzas, where there are no ATMs or point-of-sale terminals, complained to Cubadebate that “most of the companies in this area have their accounts in the Bank of Credit and Commerce (Bandec).
They give their workers magnetic cards from that bank, which creates difficulties in extracting salaries; because the Bandec branches are only found in the municipal capitals, while the branches of the popular councils are of the Popular Savings Bank”.
Result? To collect their salaries, many people in the area have to travel to the municipal seat. The same is true for farmers, who live in isolated areas and often do not have smartphones, who prefer to withdraw cash when they sell their crops so they have it on hand when they need it.
“The cooperative-peasant sector is still not in a position to face banking at the level that the country needs,” Cubadebate quoted Rafael Pridas La O, president of the National Association of Small Farmers (ANAP) in the Nueva Paz municipality, Mayabeque.
“It is difficult to leave the farm to spend the entire day in a bank waiting in lines to withdraw cash. Even more so with the critical transportation situation and the distance between the popular councils that make up the municipality. Today we have cooperatives with more than two million pesos in their accounts that they cannot extract.
The farmer needs money at the foot of the furrow, because today the worker asks for up to 1,000 pesos for a morning of work, and he wants it in cash, to buy almost everything necessary to live,” the official added.
“If we ask in advance, we can get up to 600,000 or 700,000 CUP. But I have farmers with 50 workers who must pay daily around 50,000 pesos in total.
That, added to the costs of fuel, parts and fertilizers makes the 600,000 CUP that are extracted from the bank enough, tight, for a week,” he indicated.
Despite all of the above, the Cuban Government continues to promote the process that eliminates the use of cash and places the money of people and companies, as well as control over it, in the banks of a country whose economy does not produce what is necessary for its operation.