VMBS no longer affected by correspondent issues
Looking to do even more business with banking partnersWednesday, March 24, 2021
BY DURRANT PATE
Victoria Mutual Building Society (VMBS) is no longer affected by correspondent banking issues, which dogged Jamaica's financial sector in the not-too-distant past.
Correspondent banking relationships are needed for executing international banking transactions and holding hard currencies for local banks. In the past few years Jamaican and other Caribbean banks have found themselves in a conundrum whereby American conglomerate banks have been restricting their correspondent banking relations with them, as it regards the holding and management of hard American cash on their behalf, fearing de-risking concerns.
De-risking refers to the phenomenon of financial institutions terminating or restricting business relationships due to a combination of cost/benefit considerations and concerns about anti-money laundering (AML)/ counter-financing of terrorism (CFT) risks. VMBS President Courtney Campbell boasted that the society has overcome its correspondent banking challenges, declaring, “We have no correspondent banking concerns at this time.”
Speaking at a recent Jamaica Observer Business Forum, Campbell disclosed that VMBS has found worthy and able correspondent banking partners to provide the needed service for its clients and customers.
GETTING OVER CORRESPONDENT BANKING CHALLENGES
He singled out City Bank as VMBS main correspondent banking partners, as well as Lloyd's Bank out of the UK as another of its correspondent banking partners. Campbell conceded that at the heights of the correspondent banking conundrum faced by Jamaican and Caribbean banks in 2015, VMBS had been affected but since then the society has gotten over those challenges.
“We have maintained good, strong relationships with our current correspondent banks so we have no concerns at this time,” the VMBS president explained. He pointed out that these correspondent banks are providing wire transfers, money transfers, drafts and other financial transactions on behalf of VMBS customers and clients.
According to Campbell, “We are well supported by our current correspondent banking partners, and so we are well pleased with that.”
VMBS's primary competitor, Jamaica National, has itself successfully secured correspondent banking relationships in London, through its recently launched London banking subsidiary with two banks in the England capital. They are ClearBank, which operates throughout the United Kingdom, and the popular NatWest Bank.
JN SHARES ITS CHALLENGES IN GETTING CORRESPONDENT BANKING PARTNERS
JN Group Chief Executive Officer Earl Jarrett, who made the disclosure, admitted that the struggle continues to get correspondent banking relationships in America. He pointed to difficulties encountered in getting correspondent banking relations with international banks noting that this had prompted JN to set up its own bank in London, which was officially launched in the second half of last year.
Jarrett pointed to the imperative of small island states like Jamaica securing correspondent banking relations, arguing that banks in these countries are left at the mercy of international banks in executing international transactions. Given this reality, the JN Group CEO declared that his financial group has been working hard in securing correspondent banking relations.
“We still have a few [correspondent banks], but we continue to hunt for new correspondent banks. As I speak we've reached out to a number of banks,” Jarrett said.
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