By NEIL HARTNELL
Tribune Business Editor
The Central Bank’s governor yesterday said the “ultimate” goal is for the web shop industry to satisfy commercial bank concerns and reach the point where it can be “banked”.
John Rolle told Tribune Business that the first step in achieving this goal was for there to be “direct interaction” between commercial bank compliance staff and the Gaming Board, the web shop regulator, so the former could better understand the industry’s regulatory controls and standards.
This, he emphasised, would both allow the Gaming Board to identify “gaps” in the web shops’ anti-money laundering systems and enable the commercial banks to understand how these procedures were implemented in practice.
Mr Rolle reiterated that the Central Bank’s licensees would not be forced by the regulator to accept web shop deposits, but acknowledged that the long-term objective was to bring that industry into the formal financial services economy.
“Ultimately, the expectation is that we would get to the point where whatever satisfaction is needed is there,” the Central Bank governor told Tribune Business.
“It is an activity [web shops] that has been legalised, and we have to make sure it is operating in a fashion that allows it to be banked.”
Bringing web shop gaming into the formal Bahamian economy, and having its deposits accepted by commercial banks, thereby integrating the sector into the financial services system, was one of the Government’s key goals in legalising, regulating and taxing the industry.
This objective, though, has met with minimal success to-date, as only Bank of the Bahamas, which is 65 per cent majority-owned by the Government, has publicly confirmed it is accepting web shop deposits.
Both Commonwealth Bank and Fidelity Bank (Bahamas) have declined to accept this money, while the Canadian-owned banks - Royal Bank of Canada, Scotiabank and CIBC FirstCaribbean - say they are prevented from doing business with the web shops by their global policies on gaming monies.
This means that a sector where hundreds of millions of dollars are being recycled every year remains largely outside the formal economy and banking system, representing a potential money laundering risk that could attract the attention of international watchdogs.
However, Mr Rolle’s comments are likely to alarm some observers, who will interpret them as Central Bank pressure on its licensees to bow to Government policy and accept web shop monies despite their legitimate reservations about doing so.
Mr Rolle, though, repeated the sentiments contained in his speech to the Grand Bahama Chamber of Commerce last Friday, reiterating that the Central Bank wanted commercial banks to make web shop-related decisions that were based on fact, rather than perception.
“By promoting direct interaction between the regulators and the [banks’] compliance people, they can ask questions and, if they detect there are any gaps, it’s an opportunity to discuss it one on one with the Gaming Board and other regulators so they can make these tweaks,” Mr Rolle told Tribune Business.
“We do know that the anti-money laundering standards for banks are the same principals that the Gaming Board puts across to its licensees.
“I think that now the wider financial services industry has to get a good understanding of how it [the web shop industry] works in practice with the movement from guidelines and standards to actual operations.”
Reassuring that no commercial bank will be forced to transact business with the web shops, Mr Rolle added that any relationship between the two sides would have to “stand on its own two feet”.
“They will have to satisfy any bank they deal with in terms of controls and systems they have in place,” he told Tribune Business. “It’s a client-by-client type of satisfaction they will have to provide.
“Some of our commercial banks have policies in terms of the client they bank outside of this jurisdiction, and that’s not going to change because of this jurisdiction.”