SCB loses corresponding bank partner
As of 1st November 2020, the French bank; Société Génerale de Paris, will cease its relations with the Seychelles Commercial Bank as its corresponding bank. This comes as Seychelles was further downgraded by OECD, on the Common Reporting Standard (CRS), from being a country which was largely compliant to a partially compliant status. The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange Of Information (AEOI) regarding financial accounts on a global level, between tax authorities, which the Organisation for Economic Co-operation and Development (OECD) developed in 2014. Its purpose is to combat tax evasion.
Last year, Seychelles had managed to claw back up to become a tax jurisdiction which was seen as being largely compliant with the CRS, but this year’s review, has returned the partially compliant status. This means that the country is regarded as a possible grey area where taxation compliance by offshore businesses is concerned.
Such a report impacts negatively on the country and has its repercussions. Amongst these, is the fact that the local banking community will be subject to some restrictions, including the loss of correspondent banking facilities with international banks. As most of the banks here are branches of a foreign institution, they are not as badly affected as those such as Seychelles Commercial Bank which is state owned.
SCB has already lost its corresponding bank partner for the dollar a while back, when the unfavorable reports and grading from the OECD started. The bank was holding on only because it still had its French correspondent bank – Société Générale de Paris. However, with this latest downgrading of the country’s status by OECD, ‘La Société Générale de Paris has announced that it will be stopping its banking relations with SCB as of the 1st of November this year.
SCB has already started to inform its clients of the impending change, which will really make it difficult for those amongst its account holders who receive funds from abroad. Question put to the Secretary of State for Finance Patrick Payet, as to what the government intends to do, he explained that already they have started to seek other alternatives. SS Payet said that they are trying to find foreign banks to buy shares into SCB. The government is retaining 60% of the shares.
Payet assured the media that the SCB issue will not affect the other banks and as such, there are other options available locally for clients who are affected by this situation.
