Imbert knocked over interference

Finance Minister Colm Imbert was “out of place” to ask First Citizens bank for a report on compliance with financial obligation regulations, since the Central Bank is the local bank’s regulatory body to whom they report, former minister of finance Mariano Browne says.

Browne was commenting yesterday on moves by Imbert following Planning Minister Camille Robinson-Regis’ claim of “breach of confidentiality” against state-owned First Citizens and the closure of her accounts there.

This followed media questions about a large deposit she made at the bank, her confirmation of a cash deposit of $93,000 and allegations that she didn’t do the required source-of-funds declaration. However, she said that this was done.

Imbert subsequently said he had asked First Citizens for a report on compliance regarding financial obligation regulations. At Thursday’s Cabinet media briefing, Prime Minister Dr Keith Rowley fuelled the issue when he said that he couldn’t trust First Citizens with his personal information.

But Browne, expressing concern about the situation, said Robinson-Regis has avenues for action and is entitled to pursue them if she chooses. However, he said the Finance Minister didn’t have the right to interfere, since it was a personal matter and didn’t require the intervention of any Government party.

Browne said the minister only had oversight of the health and structure of the financial system, which was the very reason the Government intervened in the creation of First Citizens years ago. 

“The minister has overall responsibility to look after the strength of the structure and economy and must be discreet and manage situations with sensitivity,” Browne said. 

Saying it was wrong for Imbert to get into public policy issues by seeking such a report from First Citizens in the manner he had, he added, “He’s completely out of place, not understanding his responsibility. The entire situation requires forbearance and patience and should have been handled more delicately.”

Browne said Imbert’s request for a report from the bank—where Central Bank was the regulatory body—could also undermine trust in the bank, since members of the public may feel if the Government can source information from the bank other information about people’s loans, accounts, and other information, might also be obtained.

Yesterday, the Central Bank of T&T (CBTT), replying to T&T Guardian queries about which jurisdiction banks fall under— CBTT or Ministry of Finance—confirmed that banks are licensed to conduct operations by the CBTT.

Asked if the ministry can seek reports from banks on compliance with financial regulations, CBTT stated that its Financial Institutions Supervision Department is the unit that monitors compliance with the obligations of licensed institutions.

On whether the CBTT is looking into the Robinson-Regis/First Citizens issue and if she had filed a complaint with CBTT, the CBTT stated, “Issues that need to be resolved between clients and banks are generally brought to the attention of the Office of the Financial Services Ombudsman (OFSO) or the Central Bank.

“Confidentiality provisions prevent the OFSO and Central Bank from giving information on whether or not such reports are made or any other aspects of such matters.”

Banking sector experts also yesterday pointed out that First Citizens isn’t 100 per cent government-owned, since the Government only has 78 per cent shareholding.

An official said, “In a situation of a bank being 100 per cent state-owned the owner can ask about things, but when the bank becomes a public company—like FCB is—and the State is just one of several shareholders, you can’t ask for information like that. All shareholders get the information at the same time, not just one; and one shareholder cannot know someone’s business since that would compromise everything.”

Imbert didn’t reply to emailed queries on the issue.

Business sector concerned...

T&T Manufacturers’ Association president Rolph Balgobin said yesterday he couldn’t comment on the specifics of the First Citizens matter since he wasn’t sufficiently informed. 

But, he said, “What I can observe is confidence is integral to the successful operation of the bank as this is a very important indigenous institution.

“It’s very important that all the parties involved understand what’s at stake here and act accordingly as confidence is something that takes years to build—and moments to destroy.”

Amcham Chamber president Ravi Suryadevara said, “A large cash transaction, as reported, is unusual for an individual and in most jurisdictions would have a probability of further enquiry.

“However, all persons have a reasonable expectation of privacy, even if a process of further review is undertaken. Financial institutions should also always have adequate procedures to protect customers’ privacy. However, as with any system, individuals within can undermine these procedures. We are therefore expectant that the institution will deal with this appropriately and await the determination of what transpired.”

On the potential impact of the overall situation—including Government’s criticism of the First Citizens—on the financial system, he said, “The greater substantive issue facing the financial system and country is the wider rubric of the Fourth Round Compliance Review of the Caribbean Financial Action Task Force, for which T&T is the present chair. Within this compliance regime for anti-money laundering and counter-terrorism financing, dealing with politically exposed persons (PEPS) and exhibition of enforcement of legislation through prosecution are crucial elements amongst the other requirements.”

He added, “Greater compliance would also mean, as Amcham T&T has articulated in past submissions to the Government, improvements to the FIU, legislatively and resource wise. Such improvements will allow the FIU to be more effective in reviewing suspicious transactions and making determinations on appropriate action, including prosecution if necessary. 

“In the absence of this, in addition to the international reputational and business repercussions, too much room is left for wrongdoers to escape. Further, in the absence of a determination on matters flagged as suspicious, much room is left for speculation and reputational damage to persons engaged in legitimate transactions. This forms part of the essential discussions that Amcham T&T continues to pursue with the Government and other key stakeholders.”