est. 2007

Barbados Underground

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To Open a USD Account Under Threat

A member of the BU family messaged the blogmaster’s inbox to inform that Scotiabank and FCIB are placing hurdles for persons wanting to open USD Accounts. You will recall the government declared that effective August 2, 2019 Barbadians can open foreign currency accounts without restrictions. Relevant link: Barbadians Can Hold Foreign Currency Accounts Without Restriction…

A member of the BU family messaged the blogmaster’s inbox to inform that Scotiabank and FCIB are placing hurdles for persons wanting to open USD Accounts. You will recall the government declared that effective August 2, 2019 Barbadians can open foreign currency accounts without restrictions.

Relevant link:

Barbadians Can Hold Foreign Currency Accounts Without Restriction

The government is obviously trying to create an environment for Barbadians to bring hard currency into the island. Feedback indicates the two banks mentioned have decided to make it difficult to open a USD account. They are saying  unless you are earning USD or receiving USD dividends they will not open a USD ACCOUNT for a Bajan.

There is speculation banks do not want to increase the expense line by paying additional insurance on a growing USD deposit portfolio. It is unfathomable Barbados is struggling to earn USD and there are entities generating  distasteful profits in times of austerity inclined to put up hurdles to an initiative that would assist the country.

Is this payback for the haircut on bonds banks have had to suffer as part of the BERT program?

 

 

138 responses to “To Open a USD Account Under Threat”

  1. Hants Avatar
    Hants

    Canadian bank.

    https://www.scotiabank.com/ca/en/personal/bank-accounts/savings-accounts/us-dollar-interest-account.html

  2. Hants Avatar
    Hants

    Another Canadian bank.

    https://www.cibc.com/en/personal-banking/bank-accounts/savings-accounts/us-personal-account.html

  3. John A Avatar
    John A

    @ Hants

    Same banks same USD deposits yet a completely different approach to entertaining the opening of the said accounts.

    You know neither of these banks locally have even offered a USD VISA debit card tied to these accounts! Remember i said debit card not a credit card. They want you to still use the local credit card they issue you so as to get the forex sales on the charges made to your local card. Wheras if they issued you a visa debit card you could charge purchases that take Visa against the balance in your account. Same banks happy to do it for you in Canada though !

    Talk about protecting a monopoly at the consumers expense!

  4. Hants Avatar
    Hants

    RBC Royal Bank of Canada first opened a branch in Bridgetown, Barbados, on February 16, 1911,

    After over 100 years in Barbados surely there is enough ” goodwill ” for the Prime Minister to ” get her people to talk to their people “.

    More importantly it is time to find out if these 3 Canadian banks want to remain in the Caribbean.

  5. John A Avatar
    John A

    Very true and the thing is we are not asking them to do anything that they are not doing for others opening the same USD accounts in Canada. As I said before we don’t need to reinvent the wheel here, we are just insisting on a level playing field that does not prejudice Barbadians on the island.

    I mean it is total hypocrisy that you resist doing it here but I can get on an Air Canada and go there and not only open one, but the same banks there are competing for my business with special offers!

  6. Hants Avatar
    Hants

    An interesting article about Canadian banks in the Caribbean.

    https://business.financialpost.com/news/fp-street/canadian-banks-caribbean-mystery-little-known-about-how-giants-make-money-in-paradis

  7. Sargeant Avatar
    Sargeant

    Are Canadian Banks the only game in town? A little bird told me that the Canadian Banks can hardly wait to hightail it outta town. When(if) they do the other Banks can take up the slack. Perhaps a listen to the PM’s Town Hall in TO is instructive, she was lamenting the fact that many purchases of high end properties were consummated in New York etc. and the country was losing tax revenue as a result and she wanted to make it easy for the parties to complete their purchases in the favored currency so the sale of an asset could be deposited here short or long term to improve the country’s FX reserves. I don’t think that there was an expectation that locals would go to Banks en masses and open USD accounts.

    BTW all high end ( and even some mid level) properties on the market are listed in USD, there must be a reason.

  8. John A Avatar
    John A

    Exactly i don’t see bajans rushing to open them in numbers, but as the PM said why should a Bajan selling a property to a foreign buyer not have the option to deposit the hard currency here as opposed to Miami or New York. Also why in winter shouldn’t those involved in tourism not benefit from the same thing?

    As they say change is good as long as it doesn’t affect certain people.

  9. Mariposa Avatar
    Mariposa

    But how could govt make such bold statement with out knowning the rules and regulations which can become hurdles
    Another example of govt making hot and sweaty political statements
    More and more every day this govt continues to exposed this country in terms of being a banana republic

  10. Tron Avatar
    Tron

    A currency devaluation through the back door of foreign currency accounts would be good. Barbados would regain competitiveness, which would otherwise not be possible due to excessively high local salaries.

    The government can then continue to spend the worthless local dollars with the Barrow on them on the civil servants. They get the right value for their nap from 11am to 2am.

  11. Mariposa Avatar
    Mariposa

    listen to the PM MIA Mottley meteorologist once again hogs the spotlight speaking once again about Dorian
    sitting next to her looking like a boy in the yard is AG Dale Marshall

  12. Tron Avatar
    Tron

    2 pm.

  13. David Avatar
    David

    Did you listen to what she said? Does it make sense? You prefer to be always consumed with the minutiae of the situation?

  14. David Avatar
    David

    This blog is about USD account,

  15. John A Avatar
    John A

    @ Hants

    I was wondering can you find what the requirements are for someone wanting to open a USD ACCOUNT in Canada?

    Would really like to see what these same Canadian banks ask for there.

  16. WURA-WAR-on-U Avatar
    WURA-WAR-on-U

    “I mean it is total hypocrisy that you resist doing it here but I can get on an Air Canada and go there and not only open one, but the same banks there are competing for my business with special offers”

    and ya don’t even have to be a citizen or resident…money is money and have the same complexion…

    as i said….what these foreign banks to in Barbados…it is a form of bondage directed SOLELY at locals to have all these useless restrictions in their lives…for their own money and they should take ALL their money out of the banks, see how they like them apples..

  17. David Avatar
    David

    @John A

    It is a different market, with different laws and nuances. Explain your self.

    https://www.canada.ca/en/financial-consumer-agency/services/banking/opening-bank-account.html

  18. Hants Avatar
    Hants

    @ John A,

    https://www.knightsbridgefx.com/open-usd-dollar-bank-account-canada/

  19. fortyacresandamule Avatar
    fortyacresandamule

    It is for this reason why I agreed with Dr Worrel. We might as well go all the way and officially dollarised the economy. Kill two birds with one stone ( fiscal discipline and getting rid of a nonconvertible currency ). The real estate maket is basically dollarised. The tourism sector is a net generator of foreign currency along with the offshore IBCs. Owning local foreign currency account plus enough borrowed reserve in the central bank… with all of the above, we are riped to transition to a dollarised economy

  20. John A Avatar
    John A

    Well I just got this information that will show you what Scotia Bank Barbados thinks of us Bajans, you ready?

    ACCOUNT TYPE:

    Scotia Bank Canada USD Daily Interest Account.

    BENEFITS:

    Monthly fee $1 USD
    Minimum balance. $200USD
    Free debit transactions 2 monthly
    Debit transaction 3 or more $1.25e
    Free USD cheques
    Tiered interest calculated daily.

    REQUIREMENTS TO OPEN:

    pieces of government issued ID 2
    Proof of Address.

    Now tell me dem don’t want a good cut ass coming here and telling us about only opening accounts for people working for a USD salary!

    Mia step in and sort dem tail out quick! They are clearly prejudicing Bajans in a way they do not their clients regardless of nationality in their own home branches !

  21. John A Avatar
    John A

    @ David.

    What is the difference ?

    Canada has it’s own sovereign currency and we have ours.

    Canada has the regulatory system and we have our Central Bank

    Canada although having their own currency export and trade in USD to a large extent. We have our bajan dollar but we export in USD as well.

    I could go on but the point is you all have drank the Koolaid that says it can’t work here because because because and I am showing you that it can work as is evident in another commonwealth state.

    I can go to Nassau and do the same with the same ID, or Tortolla or St Maarten or or or.

    I have also shown you above how competitive the same banks are in Canada to try and gain these USD accounts as compared to here.

    You mean with all that wunna going still not see the reality we are being put in?

  22. John A Avatar
    John A

    @Forty

    I agree with you 100 percent forget we pride and adopt the USD and done!

  23. John A Avatar
    John A

    @ David.

    I am not saying Scotia has to come here and offer us the exact terms as they do in Canada. For example they could set the minimum balance say at $2000 USD and implement a $100 annual fee to avoid what they call “the nuisance accounts” but don’t come here building hurdles and excuses and talking crap about having to work for a USD salary to qualify.

  24. Tron Avatar
    Tron

    @ John A September 6, 2019 9:37 PM

    John,

    You’re forgetting the government just robbed the Canadian commercial banks. Sinckler forced them into worthless Barbadian government bonds, which the new government immediately devalued. The Canadians are making sharp calculations. Officially nobody says it because it is not politically correct. But they don’t trust any Barbadians anymore. CIBC no longer trusts the local Barbadian management in Warrens. In Canada, they are regarded as total losers who are no longer even allowed to decide on the colour of the toilet paper.

    The other islands in the Caribbean you just mentioned are not in the same financial mess. The Dutch Antilles are much better managed. You can’t compare that with Barbados at all. A difference like day and night.

  25. John A Avatar
    John A

    @ Tron

    The issue the Canadian banks mentioned about having to carry the cost of the deposits is partly due to the move sinkler made when he forced them to increase the percentage of his junk paper they hold, that is true. The issue here though runs deeper, in that you can’t have 2 approaches to the same issue so diametrically opposed. You can’t refuse my money at Scotia Hagget Hall but accept it if I Bring it to Scotia Richmond Hill Canada.

  26. Tron Avatar
    Tron

    There are two other approaches:

    1) linked to the OECD and pressure from Americans and Europeans. Keyword “tax haven”. Since recently, even foreigners have to deposit their national tax number with the banks in Barbados.

    2) linked to Donville and his mess with alleged money laundering. The Canadians may be afraid of aiding the locals in money laundering.

    Maybe it’s all the discussed reasons together.

    I admit, however, that in Nassau the same harassment as in Barbados would have to apply. Compared to Barbados, the Bahamas are a real financial whorehouse … as far as Dorian should have left any of the banks there.

  27. Tron Avatar
    Tron

    If I see it correctly, the Canadians don’t even set such strict standards for the pirate nest called Jamaica.

    It’s time for the Barbadians to finally acknowledge reality. In future, we will have to take the back seat. Where now Haiti and (still) Guyana stand. Maybe we’ll sink so low that we’ll get money from the World Bank or debt relief from the Paris Club …

  28. David Avatar
    David

    Some of you continue to disrespect the wishes of the blogmaster.

    Your final warning.

  29. David Avatar
    David

    @John A

    As a commentator mentioned earlier, forget the Canadian banks, they are looking for an exit. They will run a lean shop until the opportunity comes.

  30. Miller Avatar
    Miller

    @ David September 6, 2019 4:34 PM
    “It is the blogmaster’s understanding forex held by banks is treated separately as compared to central bank reserves. Our informant advised banks are limited to hold some % of foreign liabilities. The challenge will be availability of foreign funds to satisfy demand if such occurs. Will the government flex existing requirements?”
    +++++++++++++++++++++++++++++++++++++++++++++++++++++

    It’s still a bit boggling to the mind to see how the opening of foreign currency (US$) accounts by Bajans would redound to the economic benefit of the Bajan economy.

    If the Central Bank cannot include them as part of the country’s ‘legitimate’ foreign reserves how and where does the benefit of offering such a facility arise?

    Unless these deposits denominated in a foreign currency can find their way into the local economy by way of buying goods and services to create some added value to the net national income we cannot see how they can work for the benefit of Barbados.

    In order for these ‘foreign currency’ accounts to have any measurably meaningful financial impact the Bajan economy must be dollarized to reflect Dr. Worrell’s newly-written prescription but which had been recommended long ago by other more enlightened economic gurus.

    The Bajan dollar should be either abolished and fully replaced with the US $ or brought on par in value (interchangeable) with the same greenback as pertains in the Bahamas, Bermuda and other jurisdictions extremely dependent on tourism and international business as their main sources of income.

    This, of course, would result initially in the automatic devaluation of the Bajan dollar and a sharp but one-off upward adjustment in the general cost of living for those having no access to US dollars.

  31. David Avatar
    David

    @Miller

    It will help because the holder of the USD account must use the funds to satisfy travel and other needs.

  32. Sargeant Avatar
    Sargeant

    Meanwhile within the last two days I saw USd transactions that didn’t go through any “official” channels. The first was between a US resident and a local and the second was between two locals, in both cases US dollars was exchanged for Bajan dollars. I used to be asked whether I had any US that I wanted to exchange but not so much anymore last time someone wanted CDN dollars.
    I have a US account in CAN or “Cold AssNorth” as the blog master called it which is mostly used to facilitate travel but use my debit card to get BDS cash while here or use Visa for other purchases. I suspect that much of the USD negotiated/used in small local establishments never see the doorway of any Bank

  33. fortyacresandamule Avatar
    fortyacresandamule

    @Sargeant. But then over time every currency physically deteriorate. And since we don’t print US$ currency in Barbados, these US$ cash in circulation with the public will eventually cycle back to the federal reserve via the local banking system. Banks in Barbados shipped out US$ cash in bulk to their corresponding banks in the USA. These cash transactions are high risk for banks operating under the know your customer (KYC) policy and also costly to manage logistically.

  34. fortyacresandamule Avatar
    fortyacresandamule

    Banks tend to buy US$ cash at a lower spot price than any other payment method ( cheques, postal order, wire transfer etc)

  35. john2 Avatar
    john2

    Miller

    I don’t know about locals holding foreign currency accounts but I was told the you can do business with foreign currency and get back change in the currency that you used.

  36. Tron Avatar
    Tron

    @ Miller September 7, 2019 1:16 AM

    I totally agree. A currency devaluation would not lead to an increase in productivity and would not help the export sector (since it is almost non-existent), but the wheat would separate from the chaff in the population, so to speak.

    The government would continue to pay civil servants in worthless Barrow dollars. The bureaucrats would then be able to buy less food and lose their overweight. As a result, health care costs would decrease. The government could then even afford annual salary increases of 20 percent for civil servants. The stupid Barrow dollar would devalue in the same proportion. But I don’t think the financial illiterates in the bureaucracy will notice it. The government would not spend additional money, but the naïve masses would be satisfied. The government could therefore continue to win the elections despite the devaluation.

    The top performers in society, on the other hand, earn their money in US dollars anyway. They could maintain their accustomed standard of living.

  37. Miller Avatar
    Miller

    @ David September 7, 2019 3:42 AM
    “Miller
    It will help because the holder of the USD account must use the funds to satisfy travel and other needs.”
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    Only to the extent that the overseas travel “needs” ought to be met, as a first and last resort, by travellers approved to hold foreign currency accounts.

    This would effectively take some of the pressure off the Central Bank’s reserves currently propped up by IMF bailout money with the expected ‘austerity’ conditions attached.

    If the current administration is that ‘imaginative’ in outlook it would use this opportunity to really get on the real road of economic restructuring (long overdue since 2008) by making those who want to import and drive around in luxury vehicles to meet this ostentatious “needs” pay both for both the import cost and the local value added (including all duties taxes and statutory impositions) from their own forex earning pockets.

    Let them earn the necessary forex to pay directly for this blatant example of conspicuous consumption and we would see if this administration is genuinely interested in restructuring the economy to fit the ‘needs’ of a 21 Bajan economic landscape or just another 5 years of the same-old-same-old-bullshit**ing of the ‘promises-fatigued’ discerning sector of the electorate.

  38. Crusoe Avatar
    Crusoe

    My understanding is that the operarions of the BNS in Barbados and Eastern Caribbean was recently sold.

    In addition, who actually owns FCIB?

    Might this be why the operations differ between here and Canada?

    However fully agree, this looks as if the respective institutions are seeking to monopolise the forex trading by forcing people to effectively turn forex over to them, irrespective of what Government allows? Surely such would be illegal?

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