The Bank of Montserrat Ltd. (BML) announced Thursday that the staff of the Royal Bank of Canada have the opportunity to continue employment with their institution, if they wish to do so, once the conversion phase is complete.
During a public forum held at the Montserrat Cultural Centre and streamed online, Chairman of BML Dalton Lee said the process to acquire the local branch of the RBC has taken longer than initially anticipated. In late 2019, it was announced that BML, as part of a consortium of five indigenous banks in the Eastern Caribbean Currency Union, had submitted a bid to purchase their local branches of RBC, after the international institution announced it would be pulling out of the market.
The bank’s chair said their application was submitted to the Eastern Caribbean Central Bank (ECCB) in January 2020. ECCB’s Governor announced last December it would be approving the sale.
Following the ECCB approval, it was then up to the Ministers of Finance in the currency union to approve the acquisition, which they have. Lee revealed that his bank has received written approval from Premier and Minister of Finance Joseph Farrell and the Cabinet granting permission for Bank of Montserrat to take over local operations of RBC. The individual ministers of finance in the other islands involved in the sale must also give a vesting order for the sale to progress. These are still in process, but the chairman expects these will be followed in a day or two.
Purchasing RBC was not initiated by the Bank of Montserrat, Lee told the gathering. He explained that the sale was an opportunity that presented itself as RBC had decided to exit the region and one that the board felt would strengthen the local bank. Acquiring RBC puts the local bank in a stronger position to increase its capacity, serve its customers and stabilise its position in Montserrat’s economy, Lee added.
“The Bank of Montserrat is stable,” the chairman declared. “We don’t want to do anything to adversely affect Montserratians. What we have done during our deliberations is to be mindful of the concerns (price gouging and monopoly as the sole bank).”
Lee said RBC was not BML’s main competitor and has not been so for quite some time. The St. Patrick’s Cooperative Credit Union, he shared, was their competition.
What Happens Next?
The Acquisition Close date is April 1, 2021.
Officials expect a transition period of eight to 12 weeks starting April 6, 2021. RBC operations to continue at its offices in the Red Cross building.
Once the Conversion period begins, which should take another eight to 12 weeks after the transition period ends, transactions for RBC customers will be available at the Bank of Montserrat offices only. The RBC branch will be permanently closed.
Day One Operations – April 6, 2021
BML manager Baldwin Taylor said one of the first orders of business is to transition all of the current RBC customers who use their point-of-sales machines to a BML machine.
Bank of Montserrat will no longer process US dollar, sterling or Canadian bank drafts as of April 1. Taylor said correspondent banks are not willing to take on the risks associated with processing bank drafts.
RBC will no longer open savings, checking or term deposit accounts.
RBC will no longer process loans.
RBC customers to continue to use same account numbers during the transition period. An 8 will be added to customer’s account numbers during the conversion period.
RBC checks will continue to be legal tender during the transition period. Two weeks before the end of this max three-month period, all RBC customer will be issued Bank of Montserrat check leaves. Issued RBC checks will be valid up to six months from the end of the transition period. However, customers should not use the checks after they have received instructions by BML to do so.
RBC Credit Cards
Up to six weeks after closing, all RBC credit card holders will receive an equivalent value BML issued credit card. Card limits and outstanding balances will be transferred. Customers will be advised when the cards are ready. RBC and BML will coordinate the termination of the old cards and the activation of the new cards to avoid loss of access to customers.
RBC ATM
During the transition period and up to three months from April 6, 2021, customers will be able to use the RBC ATM for current cash services, except for withdrawals from other ECCU bank accounts.
Similar to the credit cards, customers will be issued a BML ATM card.
Wire Transfers
BML asks for RBC customers to walk with supporting documents when conducting wire transfers. This is important for them to build up their know your customer data.
Visa/Mastercard
During the changeover period, RBC customers will continue to have the use of the credit cards The BML ATM will not access Visa/Mastercard credit cards. Cash advances from the Visa card can be processed via the bank tellers. BML does not have a license to manage Mastercard transactions as the EC$200,000 per year cost is prohibitive given the current client and activity numbers.
RBC Staff
All employees of RBC Montserrat have been advised that they will be absorbed into the BML family once the conversion period has ended. During 2020, BML had a number of resignations which they left unfilled, pending the acquisition of RBC and its staff.
BML officials met with RBC staff for the first time on March 24, 2021. They had been forbidden to communicate with staff and RBC customers under the terms of the sale until certain stipulations and approvals had been received.
The Future
BML officials said they are positioning the bank to meet regional and global standards as it relates to financial services, mitigating risks and improving service delivery. The bank, last Friday launched its mobile banking application, which it hopes will allow customers to use the services online without needing to come into the office.
The bank said it welcomes the move by the ECCB to introduce digital cash as this fits with global trends and will reduce the cost of producing polymer notes.
