Twenty years after the Owen Arthur administration sold the Barbados National Bank (BNB), the Mia Mottley-led Government says it is considering re-establishing an indigenous commercial banking presence in Barbados.
Speaking at a townhall meeting in Brooklyn over the weekend, Prime Minister Mia Mottley contended that with banking regulations tightening over fears of losing correspondent banking, resulting in Barbadians being unbanked or finding it difficult to even open a bank account, Government is again considering getting involved in commercial banking.
Mottley pointed to the fact that the banks require a utility in a prospective customer’s name before opening an account, a requirement that is difficult to meet for persons who reside with their parents or in rented premises. She revealed that her Cabinet has held policy discussions on the issue, noting that before forming the Government last year, Minister in the Ministry of Finance, Ryan Straughn, would have created a policy paper on incorporating some form of banking at the post office.
“Why is the threshold for proof of identity as high as it is, because what you are effectively doing is unbanking people. So what we are doing in the Government is looking at the reality that we are going to have to take some sort of responsibility and have some sort of domestic banking presence again because of what our people are facing with respect to the increase in persons who are being excluded from the banking system or who are being unbanked,” said Mottley.
She added, “If I was the Government in 2009, I would have been loathed to take further steps to come out of commercial banking given how much the world has changed. I understand why we sold the national bank when we did but I see how much the world has changed since then and we are going to have to find some way of defending the people of Barbados by having some indigenous banking presence here again.”
The Prime Minister also pointed out that the problems with these sometimes prohibitive banking regulations was not only impacting individual but legitimate businesses as well.
“Legitimate enterprises under the law, who in other jurisdictions may be considered as risky, are also being told, ‘come and pick up your money from my bank, even if you need a wheel barrow to pick it up because we are no longer banking you’. This is unacceptable for us and it is not just Barbados but other countries in the region. So we are going to have to have a banking presence that adheres to the very highest of prudential standards while reminding people that regulation must be appropriate to risk and the last time I checked, the biggest centres for money laundering are London, New York and Zurich,” she said.