Sep 2016 Financial News

BATT president: Bank transactions at risk

Sep 14, 2016

T&T’s financial system is under immense scrutiny from global institutions as are transactions from this country, says president of the Bankers Association of T&T (BATT) Anya Schnoor.

“We know what happened to Belize. A lot of banks—correspondent banks—pulled out of Belize. There is word that they are pulling out of Guyana. They have pulled out of a lot of the smaller islands. We can’t pretend. We may be next. We are very concerned. 

“If a local bank does not have a correspondent bank in the United States, we can’t issue credit cards anymore in the country because we would not be able to settle with Visa and MasterCard. We would not be able to do wire transfers, so we would literally be cut out of the banking system,” she said

Schnoor said when countries lose correspondent banking relationships, a range of daily transactions are affected.

She explained: “They have to settle a bill in the US...they would not be able to send a wire to settle that bill because we would not have a relationship with a correspondent bank in the States. We have to remember we don’t issue or print US dollars. 

“Every US transaction has to go through a US bank and it requires us to have a correspondent relationship. They are not going to bank us if we are not in compliance. This is not something that started in the last year. I want to make that clear.”

In mid-August, Finance Minister Colm Imbert and US Ambassador John L Estrada signed an Inter-Governmental Agreement (IGA) aimed at improving international tax compliance through mutual assistance in tax matters

Schnoor noted frustrations expressed by some customers when asked to provide detailed personal information and source of funds to open an account, but said international requirements have to be met because there is a lot of money in circulation, much of which is kept out of the formal banking system.

She said BATT has to “make sure that we enable banks and help banks do the things that they have to do and that requires us enforcing the laws on the books.”

“While we have signed the IGA with the US, which marked the first phase of the process, the next step is for the government of T&T to pass the enabling legislation by the end of September. We haven’t seen the draft of the enabling legislation.”

Source:
Sean Nero
Trinidad Guardian
Wednesday September 14, 2016

http://www.guardian.co.tt/business/2016-09-14/batt-president-bank-transactions-risk