St. Vincent Deposit Guarantee Scheme

Information Leaflet – How Bank Account Holders in St. Vincent and the Grenadines are Protected against the Failure of their Bank or Credit Institution.

For international creditors it is important to realize that St. Vincent and the Grenadines does not protect bank deposits in the traditional and conventional way. However, several measures are taken to intercept the absence of a bank deposit insurance scheme. These include bank supervision by the Financial Service Authority (FSA) and regulation laid down in for example the International Banks Act (Chapter 99) and the International Business Companies Act. As a member of the Eastern Caribbean Central Bank (ECCB), the financial sector in the jurisdiction is subject to independent oversight.


Deposit Guarantee Scheme St. Vincent and the Grenadines: With a population slightly over 100.000 residents, deposit insurance has not been the preferred means to maintain financial stability and protect customer deposits. The banking and financial sector differentiates between domestic services and international banking. International banks should refrain from any domestic activity with and for residents. In addition, such international banks are subject to Class A or Class B licenses, which limit their financial risk taking and are thus well capitalized.

ECCB Initiatives: A deposit insurance fund for ECCB members (Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia, and St Vincent and the Grenadines) may be set up in the future.

Secured Deposit Limit: Zero – The financial sector in St. Vincent and the Grenadines does not provide bank deposit insurance at the moment.

Alternative Public Measures to Safeguard Bank Deposits: A distinction between the local market and international business requires a comprehensive approach towards bank supervision. Most international banks serve the offshore financial sector. Their business model does not focus on traditional deposit taking and unsecured loan provisioning. It therefore allows them to be well-capitalized. Exposure is related to conduct risk and regulatory breaches. Licensed financial institutions in St. Vincent are subject to ECCB and FSA supervision.

Minimum Capital Requirements: International banks are held to maintain fully paid-up capital, minimal capital and statutory deposits. These capital requirements are between $500.000 and $3.000.000 for the capital fund, and between $100.000 and $500.000 as capital reserve.

Early Intervention: There are different reasons why the Governor of the ECCB may decide to revoke or suspend the license of a supervised financial institution. Among them are the licensee’s lack of qualifications, its business activities detrimental to the public interest or to the creditors, its declining solvency and financial situation, violations of the applicable Acts and respective AML regulations, and termination of the institution’s activities.

Resolution Procedures: When a licensed financial institution or financial holding company violates any provisions of local bank regulation or the International Banks Act, the ECCB may appoint an official and statutory administrator for a maximum period of 12 months, further extended by another 12 months if needed. Such interception is justified when the institution engages in unsafe and unsound practices resulting in a decrease in the value of the institution’s assets and threatening creditor interests. Upon appointment, all the powers, functions, and responsibilities of the financial institution are then assumed by the official administrator.

Duties and Powers of the Statutory Administrator: To prevent a sharp decline in the value of the troubled financial institution, the administrator suspends dividend payments and other capital distributions to staff. In addition, the administrator suspends some or all payment facilities. To resolve the challenges at the financial institution, the administrator conducts an inventory and drafts a plan of action for consultation with the ECCB. Consequently, within 30 days an inventory of assets and liabilities is presented; within 90 days a report on the financial condition, future prospects and an assessment of assets likely to be realized is presented. The report also defines a plan of action to a) bring the institution back into compliance, b) liquidate the financial institution, or c) any other course of action that will minimize disruptions to depositors and preserve financial stability.

Historic Events and Future Prospects: The failure of the Saint Vincent Building and Loan Association BLA (2013) and Loyal Bank Limited (2018) reveal the inner working of the resolution procedures for financial institutions in St. Vincent. These case studies clarify the preference to avoid liquidation for local banks. International banks without future prospects on the other are subject to the liquidation regime. More information is available on this website under the Bank Deposit Protection in St. Vincent tab.


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