Banking Bill Passes Unopposed : Both Sides Raise Concerns LK Hewlett Story Updated: July 31st 2015 at 9:20 am
After two days and 14.5 hours of debate, the 145-page Banking Bill 2015 was on Wednesday ( July 29 ) passed in the National Assembly. The bill, legislation constructed by the Eastern Caribbean Central Bank and ECCU Monetary Council, is being adopted in all 8 ECCU member territories. St. Kitts became the 6 th member to pass the legislation, with only overseas territories Anguilla and Montserrat still outstanding. The bill was the source of controversy in some member countries where stakeholders raised concerns that it gave too much power to the ECCB in relation to regulatory powers over commercial banks and other financial institutions. During the two-day debate, both members on the opposition and government benches indicated their support of the bill which they deemed “a necessary piece of legislation”. Some of the concerns raised include the 300% increase in capitalization. Banks and financial institutions regulated by the ECCB will now have 450 days to go from $5 million capital to $20 million. The ECCB will also have the power to remove directors, determine majority shareholders and fire employees of these institutions. Under the new Bill the ECCB would be responsible for the granting of licenses to banks and will collect the related fees, whereas the government was charged with those responsibilities before. Banks will now have to submit their financial reports to the ECCB three months after the end of their fiscal year and will have to change auditors every 6 years. Members agreed that the Bill was being brought to protect the interest of depositors in the event of any distress with the banks. The government assured that in 6 months the bill can be review and amended if necessary. On Wednesday evening Sir K. Dwight Venner held a discussion with regional media regarding the new legislation. He explained that it attempts to address major issues in the banking sector following the fallout from the global recession and to correct the deficiencies in the previous Act ‘to ensure that our legislation is compatible with international standards, in order to preempt future crises, to enable the authorities to resolve failed banks more efficiently and effectively, to protect depositors, and to maintain financial stability”. Sir Dwight said in discussions of the new Banking Act, although several issues were raised, the power granted to the Central Bank seems to have “animated people the most”. “This raises some very important issues for us as a society and how we exercise the balance between public and private interests, the accountability of unelected officials, the role of the courts, the perceived operations of the Central Bank and its constituent parts – the Monetary Council, Board of Directors, Governor and Management.” He pointed out that the main reason for the Act was the protection of depositors, however that issue was the least questioned. “A lot of the discussion thus far has been focused on very narrow individual interests and personal animus towards the Central Bank; this is an insular and inward looking approach which is out of sync with the global environment in which we exist. For these reasons and others, the discussion has become highly political instead of objectively and soberly reflective on the times we live in and the future of our countries in a very competitive and daunting international environment,” the Governor noted. He said he hope that there can be very objective, constructive, intellectually and practically satisfying discussion on the subject, which the ECCB executive stressed, is extremely important to all citizens of the ECCU countries.