St Kitts and Nevis (WINN): The Eastern Caribbean Central Bank says the 2015 Banking Act passed in the parliaments of OECS countries is already undergoing a process of reform because of the need to provide greater protection to customers of commercial banks in the sub-region.
The proposed reforms were discussed at a recent Heads of Government meeting in St Vincent and the Grenadines.
Licensing fees was one of the matters dealt with, according to the Director of the ECCB’s Legal Services Department, Merlese O’Loughlin.
“That issue arose in light of the treatment under the Banking Act as it relates to the distinction between local financial institutions and foreign financial institutions. Now, local financial institutions would pay a lower licensing fee than foreign financial institutions. The issue that we encountered in relation to foreign financial institutions that are CRICOM nationals, they would have been subjected to a higher licensing fee than our local financial institutions and that created some challenges for our member governments who are parties to the revised treaty of Chaguaramas established in the Caribbean Community. Now under the revised treaty there is that prohibition against discrimination on the basis of nationality and so we had to revisit that fee structure to ensure that our foreign financial institutions that are CARICOM nationals are treated in the same way as our local financial institutions as far as the payment of licensing fees are concerned, so that’s one area of amendment.”
Auditing requirements were also looked at, as well as the administrative penalty mechanism that allows the Central Bank to apply a penalty where a financial institution breaches certain provisions of the act.
O’Loughlin says the Central Bank is in the process of refining the draft amendments to then forward them to the Monetary Council for approval, following which these amendments will go before the parliaments in the OECS.
The ECCB official says these changes are important because they are intended to safeguard the bank deposits of the people of the sub-region.
“You should care because we are all depositors at the end of the day, we hold our wealth as citizens in commercial banks, there are very few alternatives in terms of where we can invest our monies and for most of us we put our life savings in commercial banks and at the end of the day when we want to access our funds that they are accessible, that they are there, and so the regulatory framework is necessary to ensure that there is that protection that is afforded to all depositors and creditors and so when you put your head to rest at nights you can be assured that your funds/deposits are in an institution that is well governed, well regulated and when necessary you will be able to access those funds.”
The Director of the ECCB’s Legal Services Department, Merlese O’Loughlin.
She was speaking on the Central Bank’s ECCB Connects programme.