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Bank Governor Concern Over Web Shop Funds

By RICARDO WELLS

Tribune Staff Reporter

rwells@tribunemedia.net

CENTRAL Bank Governor John Rolle yesterday said overlooking the need for more stringent regulations in the web shop sector could, in time, increase the possibility of local bank de-risking.

Addressing members of the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), Mr Rolle said he was becoming increasingly concerned over the source of funds entering the gaming industry, asserting that more regulations would be needed to assure regulatory agencies of the sector’s legitimacy.

According to Mr Rolle, speculation surrounding the sources of the large financial gains of web shop operators could lead international financial institutions to question all financial institutions in the Bahamas and, as a result, hasten their “de-risking”.

According to Mr Rolle, the lack of clarification over where funds are coming from can force foreign banks to consider the process of “de-risking” local institutions out of fear that illegal funds are involved at some point in the banking process.

Hence, he called for the establishment of regulations to maintain the separation between legitimate and illegitimate sources of funding in the industry.

“I am not concerned about whether the capacity exists (to determine how funds from the web shop industry are used); what is more important is now that you have the gambling side legal, some of what you see continues to be a symptom of (forced) integration into the economy,” he said.

Correspondent banks are those foreign entities that allow Bahamian financial institutions to provide services in their own countries, using their physical and electronic banking infrastructures.

They give Bahamian banks, and their clients, access to the international capital markets and financial system, enabling transactions to clear and be settled on a timely basis, and foreign currency deposits to be taken.

The government, through the Office of the Attorney General, has initiated a “task force” of regulators to ensure that local institutions that depend on foreign correspondent banks have identified any and all possible flaws that they might have.

On Tuesday, Abhilash Bhachech, the Central Bank’s inspector of banks and trust companies, revealed that the regulator’s first correspondent bank ‘de-risk’ survey showed that while the impact was not systemic, relationships enjoyed by Bahamas-based financial institutions were either subject to greater scrutiny or being reduced.

The concept of bank “de-risking” was first employed to offset money-laundering mechanisms throughout the world.

Mr Rolle has recommended that local institutions ensure that their relationships with their correspondent counterparts were strong, even going as far as to suggest that they begin to search out a “back-up plan” in the event that correspondent banks opt to carry out “de-risking” here.

Comments

Well_mudda_take_sic 3 years, 3 months ago

By defying the wish of the Bahamian people as expressed in a duly held national referendum, Christie has caused havoc to be wreaked on the relationships our local banks must have with other foreign banks in order to transact business involving currencies other than the Bahamian dollar. The corrupt Christie-led PLP government has royally sullied the reputation of the Bahamas as a financial centre by attempting to "legalize" the racketeering and other criminal activities of the numbers' bosses like Craig Flowers and Sebas Bastian who run the gaming web shops that now appear on just about every street corner and which are taking money from their patrons that should be used to feed, clothe, educate and buy medicines for the very young and very old in our society. Christie and his corrupt government couldn't care less about the devastating harm being caused to many Bahamians by the gaming web shops; all Christie and his cohorts care about are the tainted funds they receive from the web shop owners in return for political favours that defy the wishes of (and cause harm to) the vast majority of Bahamians.

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bogart 3 years, 3 months ago

Isn't is obvious that is there are these concerns which are genuine then how come the BOB employees who are mandated to learn and practice the Anti Money Laundering, Proceeds of Crime, Know your Customer rules etc are being put in this position? It is a known fact that the bank is not meeting Central Bank requirements then if there are large loans in peril suggests some ponzi structure where claims are not being paid or the bank has put a lid on funds departing which suggests something. Central Bank has already raised public known queries in practices of BOB - for years and this is continuing and in live time local and international banking this is unacceptable, and coupled with govt instant support or not this affects BISX shares market a billion dollar trading business with numerous other financial businesses. What about customers who have problems raises the concerns on how are they handled? Who is responsible for bad loans? Noone ? Did these bad loan customers receive banking advice? Were there loans monitored to curtail them being turning into the enormous bailout supported by the govt? Can these customers turn around and question this? The Central Bank has the ability to take action bur seems to be reluctant to take action and this is not good in the international banking area. The Central Bank needs to invite customers by AD to bring their concerns into the Central Bank.

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Well_mudda_take_sic 3 years, 3 months ago

The money trail needs to be followed when it comes to the bank accounts and clients' accounts at law firms that are ultimately beneficially owned by certain politicians and government officials and their "favoured" consultants, advisors and business cronies. The corrupt political elite and their equally corrupt business cronies in the private sector have accumulated great wealth from massive fraud perpetuated against the interests of the Bahamian people. We are daily being robbed by these scoundrels whose sole interest is to maintain their ability to continue stealing the wealth of our country for themselves, leaving the rest of us barely able to make ends meet. We have far too many in government today who are mega-millionaires, and they did not become so on their government salary. The Chinese down the road may actually be of great help to us in uncovering a lot of this massive fraud and bringing those responsible to justice.

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bogart 3 years, 3 months ago

You are very perceptive. Many flaws exist in the system. The banks and lawyers relations need to be examined AND particularly the client-lawyer-bank relations. Quote - "CENTRAL Bank Governor John Rolle yesterday said overlooking the need for more stringent regulations in the web shop sector could, in time, increase the possibility of local bank de-risking." This is an area where common sense should indicate that if the web shop could not go and open accounts then who or where is the some $135 million in annual revenues? Where did it go in the past? Another factor is the huge amounts and millions in dollars of drugs being found and evidence being published begs the question where is the corresponding cash? How does it get from the local addicts or local buyers to the source? Another factor is how does the only bank where web shop monies are deposited accept the winnings of their customers who already have Bankng accounts or are using their winnings mixed with other monies? Another factor is the the ability for anyone with a ATM card to go to the ATM and deposit cash and perhaps the Govenor can start with the BOB bank as it is a govt bank they monitor. As a matter of fact anyone can deposit money to any account in any other Branch location. Another factor is the some 28,000 WORKERS on ANNUAL WORK PERMITS which for decades? are renewed annually. Over the years many have WORK PERMITS are no longer renewed and which bank checks annually and that these accounts are not still maintained by original account holders? Without the legal work permit to work means that any funds deposited to a Bank Account is illegal. Another factor given that in many banks new staff are not hired but more volumes of work is given then it is quite likely noone can be perfect. Another factor, Majority of Work Permit Holders of some 28,000 Banking persons with Banking Accounts can only use banking accounts if they have current renewed work permits and who checks 28,000 accounts in the Banks to see if they are by legal account holders? And multiplied year after year for decades? Where is the proof to Central Bank has that this is so? Another factor in the system may be fake documentation used be WORK PERMIT HOLDERS who can use realistic photocopied documentation to open Bank accounts which may have happened years past but accounts still exists. Another factor may be applicants using names that can be reversed like Jean Claude and Claude Jean and concocting believable story to open bank account. Today it is more difficult but nevertheless errors happen. Another factor is or was the ability to send monies abroad through the banks. How can one verify that the Bossman is not laundering any money through monies paid to the employee or several of them? The Governor needs to requests or invite persons to tell the Central Bank but going public is admirable.

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