Thursday, March 13, 2014
RBTT terminates local remittance dealers accountsBy Julian Richardson Assistant Business Co-ordinator firstname.lastname@example.org
Local cambio and remittance service providers are peeved by a policy decision by RBTT Bank Jamaica to terminate their accounts due to what the bank deems as business practices outside of its risk tolerance.
RBTT has given the cambio and remittance companies a March 31, 2011 deadline to seek an alternate financial institution to support their banking needs. The bank told Caribbean Business Report that the decision was "strictly a business one" and is not reflective of any act or ommission on the part of the affected parties.
"Over the past year, RBTT Bank Jamaica Limited has undertaken an assessment of risks within its portfolio and has had to make some difficult decisions regarding exiting relationships deemed outside of our risk tolerance. Consistent with global banking regulatory and international standards, the money services business (MSB) segment was identified as representing higher risk," said the bank in a statement.
But the cambio and remittance dealers said the decision is unfair, considering that they are meeting all the regulatory requirements of the Bank of Jamaica (BOJ), regulators of the industry.
"We are a part of an approved and licensed segment of the financial sector and have consistently been meeting all POCA (Proceed of Crime Act) and other requiments as required by Bank of Jamaica and by the Finincial Investigation Division," said president of the Cambio Association of Jamaica (CAJ), Dennis Hickey.
"How can we meet the requirements of the law of the land but then a multinational bank can tell us that we don't care if you meet those requirements, our requirements are such and you don't meet it," argued the CAJ president.
Those sentiments were echoed by Jamaica Money Remittance Association president Kenarthur Mitchell.
"We think it's very unfortunate; whatever the risk that RBTT speaks of, there could be some other approach," Mitchell told CBR, adding "When you consider the importance of remittance to our country, all efforts should be made to preserve the industry."
There are 71 cambios and 50 remittance companies in Jamaica.
Hickey warned that the move by RBTT may cause other banks to follow suit and wipe out the industry, which competes with the commercial banks.
"The present danger is that the precedent being set, with one bank being able to tell us to take our accounts else where, we don't know if this could happen with other banks," noted Hickey.
Both the cambio and remittance dealers said they have expressed their concerns in written letters to the BOJ, Fair Trade Commission (FTC) and the Ministry of Finance.
"We are hoping that they will meet with us to look at our relevance and to see if there is anything can be done to ensure that this doesn't become a policy of all banks -- not accepting cambio and remittance accounts," explained Hickey, who said that only the FTC has reponded, requesting some more information.
One cambio dealer described RBTT's action as a "slap in the face" to the central bank.
"Bank of Jamaica is both the regulator for this so called 'money services business segment' and the banking sector. The direct implication of this change in RBTT's operational policy is to charge the Bank with being inept or incompetent in the best case and lacking trustworthiness and possibly even corruption in the worst instance," said the businessman, who requested anonymity.
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