FSC urges non-banking sector to stay on straight and narrow

The regulator for Barbados’ non-banking sector has warned that it will not hesitate to call in the police if evidence of malfeasance is found within their organisations.

The warning has come from Chief Executive Officer (CEO) of the Financial Services Commission (FSC) Kester Guy as he reflected on the CLICO International Life Insurance financial collapse in which hundreds of policyholders and investors lost millions of dollars.

Guy was also speaking against the backdrop of reports of questionable business practices allegedly taking place at a local banking financial institution which does not fall under his remit, but is regulated by the Central Bank of Barbados.

Governor of the Central Bank Cleviston Haynes has declined to comment on the claims.

Guy however ever made clear that the FSC is keeping a close eye on the non-banking sector.

He disclosed that the FSC recently investigated the operations of credit unions in the island and found it necessary to make certain recommendations which he did not reveal.

“We recently examined the credit unions, all their procedures, to make sure they are in line with best practices and we would have given recommendations to some entities who did not have all the standards that we would like to see and given them recommendations and timelines in which they needed to come into compliance and they have been moving in the right direction,” the commission chief told Barbados TODAY.

“There are gaps and entities are working to correct those gaps. I can’t tell you everything is perfect. At the same time I do not wish to send a signal to suggest that things are falling apart. We are working with all entities to bring them into good standing, good standards,” Guy pointed out.

He revealed that a similar approach is also being made with regards to insurance companies and pensions.

“You know there were entities whose companies went under during this whole lockdown and COVID period. So we now have to work with them to see how best we can correct the fallout for the persons who had expectations of pensions are not left undone,” the CEO stated.

“We continue to engage and look into entities and if we find things that are inappropriate, we will act,” he warned.

The FSC CEO also cautioned non-banking financial institutions that the commission would not shy away from calling in the police to prosecute persons who are found to be involved in wrongdoing.

Guy said he will seek to ensure that all the non-banking agencies under his regulatory control operate within the laws of Barbados with acceptable business practices.

“The truth is, it is not in my interest for any entity to blow up under my watch. You should be aware that anybody who is on guard when something blows up, has to account for that. Similarly, if something goes awry while I am in charge, I am called, and must be held accountable for that. I am a public servant, I represent the public and the Government of Barbados,” he declared.

The FSC has jurisdiction over insurance companies, occupational pension benefits, securities, mutual funds, and co-operatives societies as they relate to the services provided by a credit union.

Meanwhile, a source close to the banking institution against which the claims of malpractice are being made, has spoken of concerns surrounding the way in which the board is constituted and of a conflict of interest involving two family members at the lending agency who sign cheques for loans. emmanueljoseph@barbadostoday.bb