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Safeguarding citizens banking

Attorney General, Senator Claudette Joseph - referred to the Capital Bank International fiasco to emphasise her point

Parliament has approved an amendment to the Eastern Caribbean Central Bank Act to safeguard citizens against people who have a tendency to misbehave in public office.

According to Attorney General, Senator Claudette Joseph the amendment, which was passed in the Upper House last month “provides a mechanism that will guard against matters that will cause an individual territory, which forms part of the Eastern Caribbean Currency Union (ECCU) from engaging through Acts of Parliament or otherwise in activities or conduct that will be inimical to the purpose of the Act.”

Sen. Joseph referenced the financial debacle of Capital Bank International, for which former CEO and Chairman of the Board of Directors of Capital Bank International, Finton De Bourg is currently serving a 23-year prison term after being found guilty of six (6) counts of fraud in December 2016.

Debourg, was 66 years old when he was convicted by a jury in connection with the misappropriation of $166.25 million from the bank, which was not accepted into the Clearing House facility of the Eastern Caribbean Central Bank (ECCB).

In spite of the ECCB’s decision, the female senator, who is also the Minister for Legal Affairs recalled that then Minister of Finance, and now Leader of His Majesty’s Opposition Dr. Keith Mitchell still issued a banking licence to CapBank.

“The recommendation from the Eastern Caribbean Central Bank then was that the license should not be issued to Capital Bank International because the bank did not meet some of the basic requirements that would work to protect depositors. In defiance of that recommendation the Minister of Finance still issued the licence to Capital Bank International, and the rest is history,” Sen. Joseph remarked.

The licence was issued to De Bourg on February 13, 1996, under the Banking Act of 1993.

Business Sector Representative Sen. Salim Rahaman questioned whether there was “any other negative effect that making this decision to approve this (amendment) could cause.”

“I understand what the Attorney General has said about the CapBank issue, and it makes sense but it has only been once in our history, I mean, and we don’t want our citizens to lose money through policies that are not best,” said Rahaman who also sought further explanation on the development.

Sen. Joseph responded by acknowledging that the amendment is “in a sense pre-emptive, in that it seeks to consider possibilities, and to protect the (ECCU) Member States, and by extension all of the people of the Eastern Caribbean Currency Union from excesses or Parliamentary interventions that in the opinion of the bank may not be best for the region.”

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She said that the six-month old Congress government of Prime Minister Dickon Mitchell views the amendment as “more of a benefit than a risk.”

“We are part of the Eastern Caribbean Currency Union by a Treaty,” she explained, noting that the treaty gives certain powers to the Eastern Caribbean Central Bank.

“The amendments too, are generally acceded to by Member States in conference with each other, and this was one,” said the senator, who pointed out that the amendment has been in the pipeline since 2020 but former PM Keith Mitchell and his New National Party (NNP) did not make the recommended changes.

“All of the member states were required to pass this amendment, and we (Grenada) have delayed since 2020, inexplicably, from what I can see…we have no difficulty moving forward with it so early in our term because we have no intention to misbehave in public office and to be in any way the subject of the effect of the section that we are inserting into the Act, and we think it will overall be in the best interest of the people,” she added.

The amendment gives precedence to the ECCB Act over any other enactment that conflicts with the Act but does not apply to Credit Unions and their operations as they are not regulated by the ECCB.

Sen. Joseph explained that “it will only do so if in the future they become subject to the control of the ECCB and of course for that to happen there would have to be extensive consultations and of course legislative changes to the credit union related legislation.”

Cryptocurrency and Bitcoin are also not captured under the Act, which she pointed out “is different from transactions (done) digitally.”

She also disclosed that “the ECCB and most of the regional governments are more trending along the latter lines because in some quarters some people are warned about Crypto and bitcoins and those things as they are considered very high-risk investments.”

Sen. Joseph was responding to questions posed by Farming and Fisherfolk Representative Sen. Roderick St. Clair, who chimed in on the discussion while the House sat in Committee on the Bill.

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