In Bhutan’s pursuit of economic prosperity, the accessibility of affordable financial services and products becomes of paramount importance to every Bhutanese citizen. Unfortunately, the existing system leaves much to be desired, especially when examining the plight of individuals seeking reasonable financial services, as exemplified by the Bank of Bhutan’s International Credit Card System. The current situation not only reflects a deprivation of financial rights but also exposes an imbalance that perpetuates a divide between the affluent and those less privileged.

Credit cards, touted as a great benefit, are frequently marketed as a convenient means for international travel, eliminating the need to carry hard currency. The Bank of Bhutan, on its website, encourages users with promises of unparalleled convenience: “Bank of Bhutan gives you access to shop, splurge or spend as you want while you travel around the world.” However, these assurances stand in stark contrast to the practical challenges faced by Bhutanese citizens.

The Royal Monetary Authority (RMA) introduced the USD-annual travel scheme (ATS) to regulate the use of hard currency, allowing residents travelling abroad to access USD 1,000 in cash and USD 2,000 in cards annually on the production of confirmed tickets or visas.  Despite its well-intentioned purpose, the ATS is nearly unattainable for credit card users lacking sufficient collateral, as the Bank of Bhutan imposes a lien of Nu 180,000 to Nu 200,000 to release the ATS. This requirement, coupled with an annual credit card fee of Nu.900, and interest on every transaction, creates a discriminatory environment favouring the financially privileged. This scheme system looks more like a sham or scam for many without huge savings in their bank account. This is because the purpose of credit cards is to “Credit cards enable the user to have a grace period in between when a purchase is made and when the buyer needs to pay for the purchase, as opposed to a debit card or cash, which are both immediate.” But for BoB, with such a lien, the consumer is paying the cost of a credit card and does not even get the quality of a debit card. 

Thus, the current practice undermines the principles outlined in the Consumer Rights framed by the RMA, which emphasizes fair and equitable treatment, the provision of accurate information, and adherence to ethical debt recovery practices. The Bank of Bhutan fails to adequately inform consumers of these conditions, only disclosing the lien requirement upon specific customer inquiries made post-departure from Bhutan causing serious embarrassment and trauma. This is against the general practices of best credit cards which provide cards with rewards and cashback, or rewards points for purchases made through it.

The Consumer Protection Act of 2012 reinforces the need for true, clear, and timely consumer education, advocating for fair and non-discriminatory treatment by businesses. The current advertisement on the Bank of Bhutan’s website, promising seamless shopping during travel, stands in contrast to the reality faced by consumers, rendering it misleading and untrue.

The time has come for a critical evaluation of the ATS scheme and the associated financial practices in Bhutan. By embracing reform, the nation can truly progress toward economic strength and wealth, ensuring that financial services and products are accessible to all, irrespective of their economic standing. It is incumbent upon the authorities to “uphold the principles of inclusivity, fairness, and transparency in financial dealings, thereby fostering a more equitable society.”

Sonam Tshering

Lawyer, Thimphu

Disclaimer: The views expressed in this article are author’s own.