PHILIPSBURG — “Access to basic banking services is a fundamental right,” Finance Minister Marinka Gumbs declared when she presented the draft national ordinance that regulates access to a basic bank account to parliament. The draft law can count on strong support from among others MP Sarah Wescot-Williams and MP Frankie Meyers. However, from the explanation Minister Gumbs presented, it appears that basic bank accounts will come with some rigid restrictions. The Minister did not mention the amendment MP Ardwell Irion has submitted. More about that amendment later.
A study dating back to 2021 suggested that 17 percent of citizens in St. Maarten are unbanked – that is to say, they do not have a bank account. Based on the number of registered voters for the last elections (22,747) this percentage represents 3,867 citizens without a bank account.
Minister Gumbs mentioned some of the possible barriers as an explanation: low income, high account maintenance costs, limited financial literacy and lack of trust in the banking system. She also explained that basic bank accounts cannot be overdrawn, they can only be used for transactions within St. Maarten and there is a monthly deposit cap of 3,000 Antillean guilders. [Now Caribbean guilders (XCG), Ed.]
The draft law also presents some marching orders for the banks. They are not allowed to reject an applicant based on age, income, employment status, credit history or bankruptcy.
Applicants must prove that they are legal residents, that they conduct financial transactions with the government and that they have ties with the territory, for instance through property ownership.
MP Sarah Wescot Williams, the current President of the Parliament, has expressed “strong support for the legislative intentions” of the draft law. “Everyone who wants to bank should be able to do so,” she said. She also noted that almost half (46%) of unbanked people expressed a lack of interest in having a bank account. The question: is this a matter of choice, income instability, distrust of the banking system of limited digital capacity?
Neil Henderson, President of the St. Maarten Insurance Brokers Association, SIBA, expressed concern about the power imbalance between banks and their customers, particularly in the digital realm, and questioned the Central Bank’s role in all of this.
“I’m not saying the Central Bank hasn’t done anything, but if they have, it certainly hasn’t been visible,” Henderson said. “Customers remain in a disadvantaged position where rights and obligations are heavily skewed in favor of the banks. Contractual terms are often changed unilaterally, and customers have no real opportunity to negotiate better conditions—especially when these changes are presented digitally, where you have to approve and accept if you want to continue with any online process. The government, through the Minister of Finance and Parliament, must ensure safeguards are put in place so that customers are not unreasonably burdened by one-sided changes made solely in the interest of shareholder profit.”
MP Ardwell Irion, a former Minister of Finance, has submitted an amendment to the draft law that could trigger more discussion during a parliamentary debate.
According to this amendment, local banks will have to make most of their services digitally available to their clients. If the parliament approves the draft banking law Irion submitted in December of last year and the amendment becomes a part of it, banks would also have to create a Paypal-like payment platform.
The amendment makes it mandatory for banks to give their clients access to their account via the internet and with mobile applications. This way, clients ought to be able to check their balance, review their transactions-history, execute transactions and manage their settings in a secure digital environment.
Again, if the amendment becomes law, banks have to make it possible for clients and potential clients to settle all banking-related matters online. This includes opening a basic account, requesting or replacing a bank card, requesting interest and balance information, and closing their account.
Banks will furthermore be asked to make “reasonable efforts” to develop user-friendly and locally accessible digital payment services.
The amendment aims to expand the earlier submitted draft banking law with articles that strengthen the digital accessibility and availability of basic banking services for consumers. “This will make it possible for consumers to manage their banking affairs faster and safer online,” the amendment states.
The amendment forces banks to develop locally available digital payment systems, noting the access to international systems like Paypal is limited for people in St. Maarten. “The development of our own digital solutions contributes to financial inclusion and economic participation; it also diminishes the digital inequality in our society.”
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