Republic Bank’s planned acquisition of Scotiabank’s operations in Guyana and eight Caribbean countries is not on the agenda of the upcoming special meeting of the Caribbean Community Heads of Government on the CARICOM Single Market and Economy (CSME) but Foreign Affairs Minister Carl Greenidge expects that it will be raised in caucus.
“I believe it will be discussed as far as I can see. I am pretty sure the heads will find an opportunity to discuss its implications for the region,” he said.
Greenidge, who will head Guyana’s delegation to the two-day meeting which opens in Port of Spain, Trinidad and Tobago on Monday, told Stabroek News yesterday that the announcement of the intended acquisition would not have been on the agreed agenda as it would have only been a fairly recent issue.
Greenidge will lead Guyana’s delegation in place of President David Granger, who recently returned from Cuba after being treated for Non-Hodgkin Lymphoma.
The Ministry of Finance has noted that the agreement between Republic Bank and Scotiabank raises a number of issues for the local banking sector and for the public, which the ministry, the Bank of Guyana and Government will need to carefully consider. These issues include Republic Bank holding 51 per cent of banking assets and deposits.
The Government of Antigua and Barbuda has expressed concern that Republic Bank would acquire Scotiabank’s operations without any form of consultation with the regulators and has said that offers should have been made to local banks.
While the government and the governor of the Bank of Guyana will have their roles to play in dealing with the situation on the ground, Greenidge said the issues of de-risking, matters pertaining to money laundering and the impacts of regulations to guard against the financing of terrorism are pertinent to the region.
Many international banks, he said, are curtailing and cutting their operations in small states, leading to loss of correspondent banking, because the fines imposed on them for money laundering and financing of terrorism are disproportionate to the activities or offence committed.
In the scheme of things, he said, the bigger groups, particularly the Organisation for Economic Cooperation and Development (OECD) states, which make the rules and where much of the money laundering and the financing of terrorism take place, are not harmed by the regulations.
In making the rules and regulations, he said, they take no account of the size of the economies of small states, thereby discriminating against them. “Something is inappropriate,” he said.