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Mastercard cuts credit card services for 2 Venezuelan banks

Mastercard Inc. discontinued its credit card services for two state-owned Venezuelan banks in line with U.S.-imposed sanctions against the government of President Nicolás Maduro, Reuters reported.

The impacted banks are Banco Agrícola de Venezuela and The Bank of the Armed Forces, an institution run by the country's military.

The U.S. Treasury Department in March said Mastercard and other U.S.-based payment providers would not be allowed to work with Venezuelan state institutions after March 2020, due to sanctions against the country's government. The U.S. has rallied support for Juan Guaidó, an opposition leader that has been challenging the legitimacy of Maduro's government and who declared himself interim president at the beginning of the year.

In a Twitter statement, The Bank of the Armed Forces President Dario Baute condemned Mastercard's action, noting that its "legal team will respond with the same force with which [Mastercard] attacked us."

According to Reuters, the withdrawal of Mastercard's services will have a limited impact given The Bank of the Armed Forces' small size and the decline in credit card use in the country due to hyperinflation.

Venezuelan bank regulator Sudeban had already called for local institutions to come up with a new payment system, although this scheme has yet to be finalized, a financial sector source told Reuters.