Freedom of movement credit check

BRIDGETOWN, Barbados, November 30, 2007 – The implementation of the CARICOM Single Market has given more CARICOM nationals and businesses rights to work and establish in other member nations.

However, the increased movement of people facilitated by these provisions have also increased the risks to banks and other financial institutions as individuals with bad credit move among regional jurisdictions with the opportunity to rack up new debt as they go along.

With this risk in mind, indigenous banks in the Caribbean have agreed in principle to step up efforts to create a mechanism for the sharing of customer credit rating information across national boundaries.

This decision has come out of the recently concluded 34th annual general meeting and conference of The Caribbean Association of Indigenous Banks (CAIB), which was held in Guyana this month.

Chief executive officer of the CAIB, Patricia Hamilton told Caribbean 360 from the organisation’s Castries, St Lucia offices that the banks recognised that efforts to arrive at a regional credit bureau had been fragmented so far and there was a need to come up with a concrete plan to take the process forward.

Hamilton could not give a time frame in which the banks would come up with the plan, but she did say there were several regional and multi-national players who were in the process of seeing how they could make it happen. She said the banking sector in Trinidad and Tobago was fairly advanced in its efforts, Jamaica was working on it, and the Eastern Caribbean was pushing ahead.

The banking executive added it was recognised that if the regional financial community was to move forward there had to be greater information sharing across territories. She noted that in order for the information sharing to take place the banks would have to harmonise their different operating platforms.

Hamilton said banks were faced with the trade-off between protecting themselves and decreasing efficiency as the extensive due diligence and background checks needed to be carried out on new clients that came into their markets was time consuming.

The CAIB is a community of locally incorporated/owned banks and other financial institutions in the Caribbean/CARICOM Region, which provides opportunities for discussion on issues impacting the indigenous banking/financial services community as well as for the sharing of experiences and networking.

At the annual meeting and conference in Georgetown, Guyana between November 12t and 15 participants focused on enabling the growth of the regional banking and financial services sector within the context of the global banking and financial services environment.