The Cayman Islands Bankers Association (CIBA) has informed the Ministry of Financial Services that banks have adjusted their practices in relation to securing US cash, in order to better service the increased demand that has been caused by the money services businesses' (MSBs) requirement that customers now use US dollars for remittances.
CIBA President Mark McIntyre acknowledged that the banks' adjustments, in relation to the MSBs' decision to only accept US cash, caused some initial disruptions. 'However, now that the banks have made adjustments to their practices, those disruptions largely have been resolved', he said.
In addition, Mr McIntyre said that local banks are continuing as usual to facilitate wire transfers for persons who are sending monies overseas.
Providing background, Councillor Roy McTaggart, who is acting as the Temporary Minister for Financial Services, said the MSB issues are not unique to Cayman. Instead, they stem from strategies undertaken by financial institutions, which are intended to reduce their perceived global banking risks in relation to money laundering and terrorist financing.
'These strategies are having a domino effect on money remittance services worldwide, regionally and locally,' he said. 'CARICOM, for example, has raised this as a regional concern, as has the Caribbean Association of Banks.
'As a consequence, based on the current situation, certain banks in Cayman have withdrawn from providing banking services to MSBs'.
Mr McTaggart noted that discussions among MSBs, local banks, the Cayman Islands Monetary Authority and the Ministry indicate that more convenient, long-term arrangements are being considered in relation to money services.
The Cayman Islands Monetary Authority (CIMA) will continue to regulate both local banks and MSBs, in order to ensure adherence to globally accepted standards, said the Authority's Managing Director Cindy Scotland.
'CIMA is aware that global regulatory bodies, including the World Bank, Financial Stability Board, and Financial Action Task Force have issued statements supporting the need to continue remittance services worldwide, and the need for global bodies to provide a clear framework for their legitimate use', she said.
Mr McTaggart said that although the decisions are commercial, Government will continue to assist and support local banks and the MSBs, as they endeavour to develop sustainable solutions.
'Government is involved in this matter in order to ensure that the people of the Cayman Islands have access to the services they need, in order to continue financially supporting their friends and families abroad', he said.
-end-
Note to editors:
The following are links to articles relating to regulation and MSBs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
