Amidst increasing calls for the privatization of state assets, one Barbadian businessman is calling for the reverse in banking.
Entrepreneur Gabriel Abed wants to see the reintroduction of an indigenous bank as an answer to the threat of the loss of international correspondent banks, and to satisfy a number of growing local financial needs.
In 2003, the then Owen Arthur-led Barbados Labour Party sold 57 per cent of its interest in the then Barbados National Bank (BNB) to Republic Bank of Trinidad. By 2012 Republic had accumulated 65 per cent stake in BNB, which it then renamed Republic Bank (Barbados), and a year later it acquired the remaining shares from Government.
Abed, who runs a digital solutions company, told a Barbados International Business Association-sponsored panel discussion in the Grand Salle of the Central bank on Tuesday night, it was time to bring back a local bank.
“We don’t have a national bank in Barbados, we have foreign banks. What I would like to see is an update to our Financial Services Act to amend it to include a Part Four type of bank, which can partly fit under the Part One, but particularly as it relates to a payment bank,” Abed said.
He said such a national bank would not allow access to credit, loans, or mortgages, “but provides the payment layers that our consumers will need to have –banking services, ATM, payrolls, bill payment, send and receiving.”
Owing to stricter banking regulations in the United States, Barbados and other Caribbean Community countries are under threat of the withdrawal of international financial houses that act as correspondent banks, enabling persons to conduct cross border transactions.
In February, Abed and a partner broke new ground by offering a digitized version of the Barbados dollar as a means of payments and money transfers.
He said at the time, the company, Bitt.com, would offer “access to global finances and the ability to receive money from all corners of the earth in as little as ten seconds”.
The 29-year-old explained then that the company, approved by the Central Bank of Barbados, cuts out the middleman payment in money transfer or other transactions that call for movement of money by using, peer-to-peer settlement, “so the transfer charges are reduced to less than one per cent”.
This, he said, lined up favourably against the traditional system of money movement in which all the middlemen have to be paid, so that the sender spends an average $15 on every $100 transferred.
“In essence, we make it cheaper, faster, and more efficient and trustworthy to send and receive money,” Abed said at the time.
He foresees a national bank in Barbados serving as the clearinghouse for such transactions between Barbadians at home or abroad.