ECCB Places First St Vincent Bank Ltd Under Receivership
The Eastern Caribbean Central Bank (ECCB) in exercise of the powers conferred under Section 138 of the Banking Act No 4 of 2015 of the laws of Saint Vincent and the Grenadines has appointed a Receiver for First St Vincent Bank Ltd (FSVB) with effect 26 May 2023.
FSVB has been providing banking services to the people of Saint Vincent and Grenadines since 1909. As at 31 March 2023, FSVB reported $46.8 million in total assets, which accounted for 1.6 per cent of the total banking assets ($2,953.4 million or approximately $3 billion) in Saint Vincent and the Grenadines.
As the regulator of banking business in the Eastern Caribbean Currency Union (ECCU), the ECCB has been monitoring the operations of FSVB closely for the past eight (8) years, including daily ongoing off-site surveillance; on-site examination in 2018, Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) examination in 2019, and most recently, on-site examination over the period 15 – 26 May 2023.
Those examinations revealed the following:
- Significant and sustained breaches of the Banking Act, 2015, especially in respect of capital requirements;
- High credit risk and low earnings performance;
- Poor accounting and corporate governance practices; and
- Ineffective risk management systems.
The foregoing deficiencies posed a serious threat to the depositors of FSVB and the future viability of the institution.
Notwithstanding the issues identified, the ECCB granted the board and management of FSVB time and opportunity to address the identified breaches and mitigate against the continued erosion of capital to place the institution on a sustainable path and become compliant with the Banking Act, 2015.
During this period of forbearance, the ECCB also issued the following directives:
- Restriction on lending to only cash secured facilities on 9 April 2018 (to protect depositors); and
- Restriction on the payment of emoluments and other benefits, including board fees on 12 December 2018 (to protect liquidity and reduce capital erosion).
In keeping with its mandate to protect the interest of depositors and creditors of FSVB, the ECCB, in consultation with the Government of Saint Vincent and the Grenadines, has implemented a two-phase resolution strategy for FSVB.
Phase I – The ECCB has appointed David Collins of Interpath East Caribbean Ltd (trading as Interpath Advisory), as Receiver to assume control of, and secure the assets of,
First St Vincent Bank Ltd for an initial period of six months. The Receiver will liquidate the institution via the sale of viable assets and wind up its affairs in an orderly manner to minimise risk to financial stability.
Phase II – A Purchase and Assumption Agreement will be executed with Bank of
St Vincent and the Grenadines (BoSVG) effective 1 June 2023, to acquire certain assets and assume certain liabilities of FSVB. The remaining assets and liabilities will remain in the Receivership for liquidation.
What does the Receivership of First St Vincent Bank Ltd mean for its customers?
- The bank is closed with effect from 26 May 2023.
- Depositors’ accounts valued up to the sum of $100,000 will be transferred to BoSVG.
- For accounts valued over $100,000, the sum of $100,000 will be transferred to BoSVG and the balance (exceeding $100,000) will remain in the Receivership.
- Depositors with balances up to $100,000 will have full access to their funds from
1 June 2023 at BoSVG’s Card Distribution Centre, 1st Floor, Halifax Street Branch. - Depositors who wish to obtain more information about their accounts may contact B0SVG at 784 452 4385/4395 or email address: [email protected] or the Receiver at 784 456 1873 or email address: [email protected].
The banking sector in Saint Vincent and the Grenadines remains stable. The other four (4) licensed financial institutions, which operate in the country, are continuing to do business as normal.
The issues which warranted the closure of FSVB were very specific to the institution. Furthermore, the closure of FSVB is not related to the ongoing community banking challenges in the United States or elsewhere. The challenges faced by some community banks within the United States stem primarily from the rapid increase in interest rates by the Federal Reserve (US Central Bank) as it attempts to reduce very high inflation.
The ECCB gives the assurance that it will continue to exercise its powers to maintain financial stability and safeguard the soundness of the ECCU banking system.
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When dem try transfer the money:
404 OOPS that page does not exist.
Great news for the holders of less than 100k, great news for Interpath East Caribbean Ltd .
Anyone with more than 100k in the bank, bend over, Interpath East Caribbean Ltd is going to have its way with you. If you’re lucky they might leave you a tip.
ANR we need more information on this one. You cannot just drop a bomb on the people of the EC Currency Union and that is it. What is the ripple effect for the region? And what will happen to the depositors’ monies? We just passed the new banking Act in 2015 to avoid these things. Our government was creative enough to take us from the brink of a financial meltdown with the ABIB fiasco and we had to bail out CUB. Now this?
https://caribbean.loopnews.com/content/eccb-places-first-st-vincent-bank-ltd-under-receivership
The ECCB has explained what will happen next.
What does the Receivership of First St Vincent Bank Ltd mean for its customers?
The bank is closed with effect from May 26, 2023.
Depositors’ accounts valued up to the sum of $100,000 will be transferred to BoSVG.
For accounts valued over $100,000, the sum of $100,000 will be transferred to BoSVG and the balance (exceeding $100,000) will remain in the Receivership.
Depositors with balances up to $100,000 will have full access to their funds from June 1, 2023, at BoSVG’s Card Distribution Centre, 1st Floor, Halifax Street Branch.
It says depositors who wish to obtain more information about their accounts may contact B0SVG at 784 452 4385/4395 or email address: [email protected] or the Receiver at 784 456 1873 or email address: [email protected].
This action demonstrates and underscores the weakness of ECCB.
A venerable institution that’s has been around since 1909 should not end up like this.
If the issues cited the justifies the closing of the close down of the FSVB; why didn’t the ECCB take action earlier to save the bank?
Let’s be clear: Four failures were cited that led to the closure.
In addition their press release includes a statement that’s very telling:
“the ECCB has been monitoring the operations of FSVB closely for the past eight (8) years, including daily ongoing off-site surveillance; on-site examination in 2018, Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) examination in 2019, and most recently, on-site examination over the period 15 – 26 May 2023.”
Basically this bank FSVB was the victim of the US anti-money laundering demands.
Read “off-site surveillance”. I don’t have a problem with anti-terirrism regs. as others do.
I have a problem with the fact that these bureaucrats allow a situation where any depositor with anything over $100,000 that amount is at risk while The ECCB issues a self serving statement.
Can you imagine the possible losses? This is almost like the CLICO losses.
To the person who claims he or she is an executive with a major financial firm. Wow!!! Just call the number.
No executive with a major financial firm would take such a callous position of just call the number.
As an executive, as you claim one would expect for you to putt forward policy suggestions to protect depositors similar to the FDIC.
Unless you just want to bicker as you pick up the crumbs
The ECCB should have learned from how we saved ABIB. Just transfer the good Assets into another bank and keep the bad assets in the Asset Recovery Company and take out a loan to back up the liabilities.
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