BASSETERRE, St. Kitts - AFTER two days of heated debate, the Federal House of Assembly late yesterday afternoon (Jul. 29), without any amendment, passed into law the Banking Bill 2015, which is aimed at reforming the sub-region’s banking system and giving more regulatory authority to the Eastern Caribbean Central Bank (ECCB).
Known as the Banking Act 2015, it provides for the regulation of banking business; the establishment of a single banking space in the currency union; and for incidental and related matters.
The bill, which had its third reading, was moved by Prime Minister Dr. the Hon. Timothy Harris.
In criticising the Act, Members on the Opposition Bench expressed their concern in the ECCB having the power to determine whether a licence should be granted, the power to revoke that licence, veto the appointment of directors and command approaches of an annual licence, thus removing control of the banking sector from the finance minister of the individual territories.
Former Attorney-General and Minister of Justice the Hon. Patrice Nisbett stated that “we have had a situation in the OECS, which is my view, where the Central Bank doesn’t be responsible for inspection of banks; inspecting banks for the requisite soundness”.
He pointed out that some of those banks that were under the Central Bank’s supervision that were supposed to be inspected for soundness ended up in very difficult and challenging circumstances.
“So, it begs the question as to what was happening in relation to their oversight and their inspections of these institutions. So what this legislation has decided, is to put all disappointed into the hands of this institution without any intervention whatsoever from the Executive,” he posited.
However, in support of the legislation, Prime Minister Harris pointed out the importance of the new banking system to the financial prosperity of the Eastern Caribbean.
“The countries of the OECS Eastern Caribbean Currency Union are at a crossroads as we attempt to deal with major changes and events in the international system and our own structural economic, social and financial issues.
“At the moment, these issues are manifesting themselves throughout our commercial banking system which comprises the most modern of our economic institutions. Because of the banking system connection to the entire economic system and its linkages to the international system, if it malfunctions it can have a disproportionate impact on the entire economy.”
