Up to 5 days for local cheque clearance; Banks have failed VI customers - No political party has zeroed in on treatment meted out by banks; Where is the FSC?

ROAD TOWN, Tortola, VI- In the heat of the 2023 political campaign, residents are disappointed that none of the four political parties running for office has spoken in any meaningful way about reforming the banking system in the Virgin Islands (VI) or advocating for better treatment of customers by those institutions.

There are five major commercial banks- Banco Popular, First Caribbean International Bank, Republic Bank (BVI), National Bank of the Virgin Islands and 1FirstBank- residents use for financial business transactions, savings and checking accounts and loans; however, customers continue to suffer long delays.

We need a central clearing house

Take for example; it takes up to five days to clear a local cheque. This is because there is no ‘central clearing house’ among the banks, something that is common in almost all other jurisdictions.

If a resident or business person deposits a local cheque, the same cheque has to be manually exchanged between banks on day 1. If the cheque has funds or can be accepted due to other arrangements with the relevant bank, the exchange or having the cheque cleared happens on day 2.

If the cheque bounces then it is returned for insufficient funds on day 3 and sometimes the bank may hold on to the cheque for a while longer. If the transaction falls on a weekend, it can take yet another two days. This means it can take up to a week to clear a cheque in the Virgin Islands (VI).

Many residents, business persons and senior banking officials blame the Financial Service Commission (FSC) for not pushing or coordinating an automatic clearing house.

Over the years, all political parties and governments have not been strong on these matters and have not fully addressed the daily banking struggles of residents and the business community.