BELIZE CITY, Thurs. July 2, 2020– The financial sector of Belize became the focus of much public debate and angst following Monday’s announcement that Caribbean Investment Holdings Limited (CIHL) formally applied to acquire Scotia Bank Belize. In a recorded address the Governor of the Central Bank, Ambassador Joy Grant C.M.G., made clear the bank’s intent to ensure that the acquisition is done in a way that safeguards the monetary and financial system’s stability and protects the Belizean dollar for the wellbeing of Belize.
The Belize Chamber of Commerce and Industry (BCCI), however, is wary of such a drastic and unforeseen change in Belize’s banking sector. In a press release dated June 30, the BCCI outlined their concerns over this transaction that would allot “50% of the commercial banking center under the control of one institution” — something that they believe will affect all personal and business customers who utilize banking in Belize.
In light of the potential risks, the BCCI believes that the Government in Belize should introduce competition laws to avoid market dominance affecting any industry. While the acquisition is under review and pending approval, the BCCI urges the Central Bank of Belize to make firm decisions to preserve the strength, integrity and autonomy of the country’s banking sector:
“The BCCI considers it imperative that the Central Bank of Belize, as the regulator of all financial institutions, exercises wholesome scrutiny to guard against further reduction of access to finance or against anti-competitive behavior resulting from the consolidation of the banking sector. It therefore urges:
“• That the Central Bank of Belize reviews this acquisition in the context of its impact on the overall banking sector, as well as from a consumer protection standpoint;
“• That the Central Bank of Belize considers the impact that the loss of Scotiabank (Belize) Limited will have on the country’s stability and its ability to access and maintain correspondent banking relationships;
“• That the Central Bank of Belize ensures that the risk of anti-competitive behavior is eliminated, in particular by introducing regulations that will limit the percentage of market share that can be held by any one institution; and
“• That the Government of Belize through its investment promoters and other relevant bodies encourages and incentivizes new commercial banking institutions to enter Belize, while the Central Bank opens the market to encourage properly regulated modern alternatives to traditional banking.”
The release went on to highlight the risk profile that Caribbean banks present to foreign banks, which Belize is not exempt from due to our issues over the years with “money laundering fueled by the illegal drug trade, people trafficking proceeds and general corruption.” The BCCI concluded by asserting that market reduction and/or concentration in the sector will only worsen the situation and result in more de-risking efforts, which have affected its members negatively in the past.