Wed | Sep 20, 2017

Negative international perception affecting correspondent banking for Jamaican banks

Published:Saturday | July 23, 2016 | 7:47 AM

At least two local banks say Jamaica is finding it difficult to do correspondent banking with overseas banks because of the negative perception international banks have of the Caribbean region, even though they are in compliance with regulations.

Correspondent banking allows overseas banks to partner with local banks so Jamaicans can send and receive money across jurisdictions.

But many International banks have been refusing to do correspondent banking with the Caribbean region, citing the region's reputation for money laundering offenses as one of the reasons.

Earlier this week Jamaica National Building Society and Victoria Mutual Building Society (VMBS) announced that a UK correspondent bank has signaled that it is no longer interested in doing business with them, as part of a decision to sever ties with banks in Latin America and the Caribbean.

Both banks have revealed that thousands of Jamaicans with UK accounts including pensioners and those who use remittance services are likely to be affected.

At a press conference yesterday VMBS and JN representatives stated that they are in compliance with international regulations that govern correspondent banking.

But VMBS Vice President of group legal compliance, Keri-Gaye Brown says Jamaican financial institutions are suffering because the Caribbean is viewed as a risky region for correspondent banking.

 

VMBS Vice President of Group Legal Compliance, Keri-Gaye Brown

In the meantime, VMBS and JN have given the assurance that Jamaican financial institutions are seeking help to address the problems that the country faces with correspondent banking.

JN Executive of government Relations and Public Policy, Onika Miller says negotiations are being held with stakeholders to make international regulators aware of the negative effects of their lack of partnership.

 

JN Executive, Onika Miller

Miller states that the Caribbean is not unique to correspondent banking challenges, adding that many developing countries around the world face similar issues with large banks from developed countries.