The Eastern Caribbean Central Bank (ECCB), which is headquartered in St. Kitts and Nevis, has confirmed that it is reviewing the Republic Financial Holdings Limited (RFHL) to acquire Scotia Bank’s operations in the Eastern Caribbean Currency Union.
The confirmation comes amid outcry from at least two regional governments.
“Pursuant to the Banking Act, the ECCB has commenced its review of this application. In this regard, the ECCB has held initial discussions with the Central Bank of Trinidad and Tobago and the Bank of Guyana. These regulators will collaborate on the review of this application. The ECCB will also confer with the Central Bank of St Maarten and Curacao,” the correspondence from the ECCB reads.
The communiqué from the ECCB gave the assurance down played the threat of a potential depletion of foreign reserve by the potential acquisition stating, “Such speculation is unfounded and unhelpful and the ECCB is clear and resolute about its mandate to protect the EC dollar and wishes to make it abundantly clear that it will continue to maintain very high levels of foreign reserves as it has done for the past 35 years.”
Antigua and Barbuda’s Prime Minister, Hon. Gaston Browne, was the first regional head to lash out against the potential sale of Scotia Bank’s operations in the region. He expressed his government’s disappointment with the bank’s decision to “sell its operations in Antigua and Barbuda without any form of consultation with the regulators or the Finance Minister whose agreement and authority for such a sale are required by law.”
He however indicated that “a consortium of local banks had already expressed an affirmative interest to acquire”.
Guyana’s Ministry of Finance also expressed a number of concerns, including “the effect on competition and the potential for Republic Bank to have too much influence on pricing of banking products and rates.”