fp Turks and Caicos

Concerns by the Eastern Caribbean Central Bank over the investment of two banks vying to rescue TCI Bank Ltd. from full liquidation has caused another postponement to allow the plan to be modified.

In early September depositors and shareholders voted overwhelmingly in support of a rescue plan offered by two Eastern Caribbean banks that would return all money to most bank customers.

Although the plan was given the green light by those vested in the bank, the group continues to struggle to satisfy all the regulatory bodies that they are fit to reopen the banks doors.

Shortly before the final hearing Sept. 22 and after discussions with the TCI’s Financial Services Commission, the ECCB voiced concerns over the level of investment by St. Kitts Nevis Anguilla National Bank Ltd. and National Bank of Dominica Ltd. Those banks are now seeking a third partner as an investor in TCI Bank in order to reduce their exposure.

A final hearing has been set for Oct. 7 to give the FSC time to complete due diligence on the new investor. However, the FSC has indicated that it would need a minimum of two to three months to undertake due diligence on the new investor.

The proposal on the table would allow all deposit accounts to have access to up to $50,000 during the first 90 days after the bank reopens. The banks say that covers approximately 97 percent of TCI Bank’s depositors.

All other depositors will be required to leave their funds in the bank for up to five years, earning an interest rate of 1.75 percent per annum from the day the new bank opens its doors.

The FSC closed the bank in April and called in provisional liquidators after a number of large withdrawals were made from the bank that was already overburdened with non-performing loans. It was the only indigenous bank in the Turks and Caicos Islands.

The Eastern Caribbean banks were one of three groups offering rescue plans. If the rescue is not approved, the bank would go into full liquidation, and depositors would get back only pennies on the dollar over several years, liquidators have said.