by Richard Coulson
A brewing dispute between our web shops and our banks is upsetting the usually sedate world of finance. Disputatious words are being exchanged between Gowon Bowe, Chairman of our Association of Clearing Banks, and Gershan Major, Director of BGOA (Bahamas Gaming Houses Association). The banks (all except Bank of the Bahamas) are refusing to accept large deposits of cash from the gaming houses.
This leaves Mr. Bowe defending one sacred banking principle: the right of any bank to choose its own customers; while Mr. Major defends an opposing principle: the right of any lawful business to deposit clean funds in a bank of its choice. The dispute breaks down further: Mr. Bowe claims that these deposits may be tainted by funds from money launderers, and it costs too much for banks to exercise due diligence to exclude the bad stuff; while Mr. Major claims that the web shop customers are shown to be clean and the corporate deposits must be clean too.
To this observer, Mr. Bowe’s position is harder to defend, since banks by now should have low-cost systems capable of detecting money laundering. Also, he seems to throw the whole problem back to foreign banks, particularly the three Canadians who are licensed here: their policies exclude exclude web shop deposits, and to maintain correspondent banking relationships we must follow their lead.
It occurred to me that since all wagering funds accepted by web shops must be in Bahamian dollars and not foreign currencies, no correspondent banking is needed. Could web shops simply do B-dollar business with our Central Bank, or set up a specialized credit union serving the web shop industry?
However, this would be a complex solution. Much better would be a face-to-face meeting between the clearing banks and the BGOA to thrash out the details of their differences, monitored by the Central Bank together with the Canadian banks. Although owned by Canadian parents, the local branches or subsidiaries must be governed by the laws and banking rules of the Bahamas, the country which licenses them to operate. The present boycott of web-shop deposits is intolerable. Why not also exclude our casinos?
Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant. He has recently released his autobiography, A Corkscrew Life: Adventures of a Travelling Financier.
