The Tribune

By FAY SIMMONS

Tribune Business Writer

jsimmons@tribunemedia.net

MICHAEL Halkitis, Minister of Economic Affairs, suggested a shift from Canadian banks to local providers can provide a solution to Family Island banking woes during a panel discussion at the inaugural Sustainable Development Goals conference yesterday.

He said: “In many of the other jurisdictions in the Caribbean, their local, what they call their indigenous banking industry, is much larger than what we have here in The Bahamas, we are still dominated by the Canadian banks.

“And, so I think what this tells us is that we need to have a more sustained push to the development and the deepening of our indigenous financial services industry, particularly our indigenous banking industry.”

Mr Halkitis said Canadian banks deciding to close many of their physical locations throughout the Family Islands has created a "vexing situation" for residents.

He said: “A very, very vexing situation. Those of you who live in the Family islands or have relatives in the Family Islands would know or have experienced firsthand the fact that many of our banks have made the business decision or a financial decision, that it is not economical for them to maintain what they call a brick-and-mortar presence in the island.

“So branches have been closed and unfortunately, many of our islands Island communities have been left without traditional banking services."

Mr Halkits said the Ministry of Finance is working with digital banking providers to launch services in the islands that lack physical branches. He added that a pilot programme should be launched this year, however, ensuring that the necessary due diligence requirements including Know Your Customer (KYC) are adequately met has delayed the process.

He said: “There have been some providers who have stepped in to provide some basic services. The Ministry of Finance is an active discussion with some providers who are proposing a technological solution where services can be provided in the island, you know, deposits, withdrawals, even loans, in those far-flung communities where the banks have withdrawn.

“What has been taking some time is just making sure that they get all of the KYC, and making sure that we are able to have adequate KYC and due diligence but we anticipate those will be sorted out very quickly, and so you will see before the end of the year, the provision for getting on a pilot basis of banks to some of these communities where traditional banks have withdrawn.”

Mr Halkitis added that the government is still promoting use of its Central Bank digital currency, sand dollar, and is making and receiving payments through the currency to encourage its use.

He said: “The Central Bank is reinvigorating its push for use of the sand dollar. And the government, we've been working closely with the central bank to make sure that the government is making payments in sand dollar and receiving payments in sand dollar so we lead by example.”

Mr Halkitis also announced a scholarship programme will be launched to attract young people into the public sector. He said the Ministry of Finance has a programme to recruit college graduates for the ministry.

He said: “We are in the process now of launching a scholarship program to attract other young Bahamians into the civil service. It will be a collaboration between the Ministry of Finance, the Ministry of Education, and the ministry for the public service, were we particularly offering scholarships for individuals who want to come into the public service.

“And so for example, within the Ministry of Finance, we have a young college graduates programme where we are attracting young people into the into the ministry and into the service.”

He said many civil servants are "poached" by the private sector and encouraged private financial institutions to ensure they maintain an environment that encourages young Bahamians to establish their careers locally.

He said: “The expansion of the economy has created a lot of opportunities. We're very, very pleased to see when the unemployment figures came out the best in 15 years. And anecdotally even some of the regulators under our purview, tell us how difficult it is to keep talent because what's happening is the private sector is poaching a lot of the talent from the public sector.

“And I think for the private sector, a big part of the job is to ensure that you promote the stable economic environment that encourages people particularly in the financial services industry, to establish themselves here, and then hence provide opportunities for the young people.”