Home' Trinidad and Tobago Guardian : December 10th 2015 Contents DECEMBER 10 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
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On Tuesday night, the
Central Bank released a
Governor Jwala Rambar-
ran s disclosure of T&T s
biggest users of foreign
exchange at the fifth
monetary policy forum on Friday last.
In the statement on Tuesday, the Central
Bank said the disclosure "has been inaccu-
rately deemed a breach of confidentiality
by certain groups within the private and
According to the Central Bank, in deciding
to release this information, the Governor
acted in accordance with his statutory man-
date as he weighed the competing interests
of "the public s right to be duly informed of
the use of a limited national financial resource
against private sector interests, desirous of
privacy in such matters."
The Central Bank added: "For the sake of
clarity, the Central Bank places on record
that its decision to disclose the said infor-
mation to the public was necessary for the
due performance of its objects and determined
that such disclosure was in the best interest
of the financial system of T&T as well as the
depositors, other customers, creditors and
shareholders of the appropriate financial insti-
"It is in this regard that the Central Bank
seeks to sternly address and correct such
criticism and further reject the baseless alle-
gations arising therefrom. These allegations
erroneously suggest that the recent release
by the Central Bank of stat which detail and
demystify the principal consumers of the
country s foreign exchange reserves, have had
the consequent effect of breaching duties of
"Those who have articulated this view have
curiously failed and/or neglected to properly
reference, consider and evaluate the Central
Bank s full statutory mandate which guides
and governs its independent functions."
On Monday afternoon, following a request
from this columnist that had been made on
Friday last, the association representing the
country s bankers, who are also authorised
dealers of foreign exchange to customers,
issued a statement on Governor Rambarran s
disclosure of the names of T&T s largest users
of foreign exchange.
It said: "The Bankers Association of
Trinidad and Tobago (BATT) views the Gov-
ernor s statement as a breach of confidentiality
of information that is supplied to the Central
Bank by the commercial banks. The infor-
mation of these business entities is privileged
and should remain confidential.
"As members of the financial services
industry, trust is a cornerstone of our business.
Trinidad and Tobago continues to trumpet
its aspirations of being an International Finan-
cial Centre and as such, the trust of our
clients, key stakeholders and the general pub-
lic, is essential to our industry.
"The BATT will be seeking a meeting with
the Governor to discuss this matter and to
ensure that we appropriately contain any
damage done to our collective aspirations of
being a world-class financial services indus-
What a remarkably forthright statement
from the nation s banker, especially in the
context of T&T s premier private sector organ-
isation, the T&T Chamber, stating on Monday
that it "wholly condemns the clear breach
of confidentiality on the part of the Governor
of the Central Bank, when he deliberately
opted to identify by name, companies and
businesses deemed to be top users of foreign
exchange in the country."
It is clear that the nation s bankers reject
the Central Bank s argument---made after
BATT released its statement---that it was
compelled to disclose the information to the
public, which in the Bank s view has a "right
to be duly informed of the use of a limited
national financial resource."
By noting that the information on the sale
of foreign exchange to its clients is "privileged
and should remain confidential" and then
pointing out that trust is a cornerstone of
the banking industry, the nation s banks seem
to be suggesting that the Governor of the
Central Bank has breached the trust that all
commercial banks anywhere in the world are
expected to have in a central bank to maintain
the confidentiality of their clients business.
The nation s bankers, quite tellingly, believe
the Governor s disclosure of private client
information has done damage to the country s
aspirations to become an international finan-
It is clear to me that the only issue for
today s meeting of Cabinet is to consider
whether, in disclosing the names of compa-
nies, the Governor of the Central Bank "is
guilty of misconduct in relation to his duties,"
which is one of the grounds on which his
appointment can be terminated by President
Simply put, the unintended consequences
of the Governor s unprecedented disclosure
are truly frightening:
• Could the disclosure irredeemably damage
the commercial banks relationships with
large, key corporate clients and local banks
correspondent relationships with international
• What is T&T s position if officials of the
International Monetary Fund and the rating
agency Standard & Poors form an opinion of
the Central Bank that is similar to that held
by the nation s bankers?
• What is T&T s position if the international
capital markets---which Minister of Finance
Colm Imbert may seek to tap in the near
future to raise US-dollar bonds---form an
opinion that T&T is not a trustworthy nation
and price the debt accordingly?
• How would T&T s revenue and employ-
ment position be affected if PriceSmart, Dig-
icel and Witco, which Governor Rambarran
stated are among the country s largest users
of foreign exchange, decide that the reputa-
tional risk of doing business in this country
is too high and decide to pull out?
• What happens to the supply of foreign
exchange to bank customers if some of the
large individual and corporate users of foreign
exchange decide that dealing with the official
banking system is too risky and that it would
be more profitable to create a parallel market?
• What happens to the relationship between
the Central Bank and its stakeholders if com-
mercial banks decide that the Bank cannot be
trusted with certain information and, as a
result, stop or delay sending such information
to the Bank?
• What happens to efficiency of the foreign
exchange market if the Minister of Finance,
in light of the Governor s disclosure, decides
to trigger section 3 of the Exchange Control
Act, which states: "The Minister may by order
designate the Central Bank established under
the Central Bank Act, or an officer in his Min-
istry to be in charge of exchange control?"
• And what happens to the standing of the
Central Bank as the banker to the Government
if the Government decides to diminish that
role pursuant to section 45 of the Central Bank
Act, which states: "The Bank shall act as
banker to the Government and shall be entrust-
ed with such Government banking business
in T&T and abroad as may be assigned to it
by the minister?"
Finally, I would just like to note a discrepancy
between the Governor s speech on Friday and
information released by Republic Bank and
published as a full-page advertisement on
Tuesday in the Guardian.
In the speech, Governor Rambarran said
that it is now public knowledge that the largest
share of foreign exchange was and is allocated
to Republic Bank Limited, the country s largest
Mr Rambarran said: "RBL saw its share of
foreign exchange fall from 27.5 per cent in
March 2014 under the old system to 25 per
cent in April 2014 under the new system."
In its statement on Tuesday, Republic Bank
said that before April 1, 2014, it received 27.5
per cent of the Central Bank s injections of
foreign exchange. On April 1, 2014, the Central
Bank "revised the sharing mechanism, resulting
in Republic Bank s share of the injections
reducing from 27.5 per cent to 8.33 per cent.
On July 1, 2014, the Central Bank again revised
the sharing mechanism increasing RBL s share
from 8.33 to 25 per cent?
The Governor is saying that the April 1,
2014, change in the sharing mechanism result-
ed in RBL s share falling from 27.5 to 25 per
cent, while RBL says that the April 1, 2014
decision resulted in its share decreasing from
27.5 per cent to 8.33 per cent.
It s either the Central Bank is deliberately
misleading the nation or Republic Bank is
doing so. Both statements cannot be correct.
A little clarity on this matter from either
institution would be useful.
Do T&T bankers
trust the Governor?
Central Bank Governor, Jwala Rambarran
Minister of Finance, Colm Imbert
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