Financial Services Regulatory Commission implicated in lawsuit

lawsuit document
lawsuit form with filler and book source:
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There could be serious implications for the country’s Financial Services Regulatory Commission (FSRC) if the BOI Bank is unable to meet a court order to allow one of its depositors to withdraw his funds.

The bank, which operates a branch in the twin island state, was ordered by the High Court in St John’s last week to refund one of its depositors – a Venezuelan national – more than US$2.5 million.

The man through his lawyer claims that he has made several attempts, through letters, calls and emails to the BOI Bank, but the financial institution located on Friars Hill Road has failed to provide him with bank statements in respect to his multi-million-dollar deposit.

Instead, he said he has been given the run-around and that no one at the bank has been able to provide an answer regarding when he can withdraw the entirety of his money.

The FSRC is implicated in the lawsuit because it is responsible for regulating banks in the country and, according to reports, has been renewing the licence of the BOI Bank even after depositors had been complaining since 2019 that the financial institution was having money issues.

“In the event that the bank is unable to produce the funds, then clearly the FSRC would have failed and there could be serious consequences. The FSRC is responsible for renewing the licence of these banks and therefore they are responsible for ensuring that the persons who are operating under the licence operate with a measure of integrity,” Lawrence Daniels – the attorney representing the Venezuelan depositor – told Observer.

Daniels said he had not heard from the FSRC until they were named in the lawsuit.

According to reports, Daniels’ firm wrote on several occasions to the FSRC requesting that they look into the operations of the BOI Bank but Daniel told Observer that the FSRC had failed to act. It was after several unsuccessful attempts that the attorney included the FSRC in the legal action.

According to the claim, the FSRC became aware that the BOI Bank was unable to honour its obligations to its customers and “by virtue of their statutory breach of duty and failure to properly monitor and regulate the BOI Bank, facilitated the non-payment and failed to ensure that the customer receives their monies upon demand”.

Both the bank and FSRC, according to the documents, have a statutory duty to account to the applicant for the funds deposited with the bank.

The Chief Regulatory Officer of the FSRC is Paul Ashe and it is unclear why the licence was renewed each year for the BOI Bank in light of the difficulties being reported.

In September 2019, when news surfaced that depositors were having problems withdrawing their funds from the BOI Bank, the FSRC issued a media statement saying that routine checks had not led to any negative findings about the BOI Bank.

The FSRC also indicated then that it continuously monitors all financial institutions, which could explain why questions have been raised about the renewal of the bank’s licence over the years.

The FSRC also claimed that the “bank had informed its clients, first and foremost, in a responsible, timely and truthful manner about all related processes”.

Ashe could not be reached yesterday for comments on the matter.

BOI Bank Corporation has been operating in Antigua and Barbuda since 1991.

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