- Basic Bank Accounts
- ECCU Targets Unified Rollout of Simplified Banking by April 2025
Camilo Gonsalves, the Minister of Finance for St Vincent articulated that a significant advancement in the amendments to SVG’s banking act pertains to addressing the aspect of financial inclusion, specifically regarding the establishment of a basic bank account.
Gonsalves expressed that this issue has persisted for numerous individuals, not solely in Saint Vincent and the Grenadines but throughout the region, particularly affecting those who are vulnerable and possess only a single form of identification.
“We all know the stories; we don’t have to belabour them today—of people who say, ‘Look, I’m unemployed or I work in a low-wage job, and when I went to open a bank account, they wanted two job letters, two forms of ID, proof of this, proof of that, and it’s very difficult to open a bank account’ This particular piece of legislation introduces the concept of something called a basic bank account.”
“The elements of a basic bank account are essentially that the bank account will be free to open, and it will not attract any charges for deposits or withdrawals. It will accrue interest. It is not subject to a minimum balance, but it may be subject to a maximum balance because this is a basic bank account, and it does not have an associated checking or overdraft facility. This is a very simplified bank account”.
Gonsalves explained that the premise will be that this individual is unlikely to engage in money laundering, terrorist financing, or conduct a substantial volume of international transactions from their bank account.
“They want to deposit some money, they want to withdraw some money, they want the salary to go into their bank account, they want to take out some money, they want to write a check, and they want to buy something. So, this would be something that would have a top limit. You couldn’t put in more than x amount of dollars in the bank account. You wouldn’t be able to engage in, you know, multiple wire transfers overseas and that sort of thing. But at the same time, you will have simplified oversight so there will be fewer regulations and fewer things that you have to bring to open the bank account.”
Gonsalves indicated that the ECCB released a circular in November 2024, urging all licensed financial institutions regulated by the Banking Act to provide basic bank accounts to their customers starting on December 1, 2024.
“To date, all licensed financial institutions have implemented some aspect of simplified due diligence in their policies and procedures to facilitate ease and reduce the complexity of opening bank accounts for customers.”
The banking sector within the Eastern Caribbean Currency Union is aiming for a coordinated implementation of streamlined due diligence processes and/or the Basic Bank Account by April of 2025.
