Gov’t going cap in hand to local offshore banks

The Gaston Browne administration fast-tracked another amendment to the International Banking Act through the Lower House of Parliament yesterday – one which will allow the state to borrow from the offshore sector.
Browne, the prime minister and minister of finance, piloted all three readings of the International Banking (Amendment) Bill 2017 which he said would “ensure the offshore sector is linked to the local economy”.
The amendment is proposed under Section 4 of the Bill and states, “A licensed financial institution may conduct international banking services with the Government of Antigua and Barbuda and its statutory bodies…”
Browne suggested that some statutory corporations may already be lining up to supplement their financing with capital from international banks.
The Bill requires that any loan by an offshore bank to a local entity must be approved by the Financial Services Regulatory Commission (FSRC) and the Ministry of Finance & Corporate Governance.
One concern which the prime minister admitted to was the potential competition to which domestic banks would now be exposed. In the draft legislation, the amount of $2 million was proposed as the minimum which an offshore bank would be allowed to lend. However, he did not specify whether that amount was in EC or US dollars.
“We only want to do this for large loan transactions. Offshore banks can also operate EC dollar accounts with domestic banks. This is to facilitate the repayment of loans and advancements to international banks after they loan in US dollars,” Browne said.
The prime minister said Antigua & Barbuda’s offshore sector “had in the region of US $1.5 billion in deposits” last year.