Central Bank of Barbados Working on Centralized Commercial Bank Payment System for Enhanced Efficiency

The Central Bank of Barbados said Friday that it is working to create a centralised commercial bank payment system for more efficient operations.

Currently, the system is fragmented with various banks “doing their own thing”, Governor Dr Kevin Greenidge declared.

Greenidge, who chaired the 62nd Bi-Annual CARICOM Central Bank Governors’ Meeting that ended in Barbados on Friday, shared with Barbados TODAY the vision presented at that conference.

“We presented on what we are doing with respect to the payment system so that we can make it more efficient,” he said. “We presented a vision of what we think . . . . Right now it is very fragmented, and we are thinking of how to make it more centralised in terms of moving forward.

“All the banks presented with respect to the fees and how it is in the region, and particularly one of the comments was that the system is very non-competitive and inefficient, especially with respect to fees and with respect to doing business. The governors agreed to work together collaboratively to see what we can do.”

Greenidge revealed the central bank will have a much greater say in the conduct of instant payment systems.

“Some banks are doing some instant payments systems, while others are not really there yet,” the central bank governor said. “But the problem is when every individual bank does their thing, they don’t speak to each other; we say in the industry, there is no interoperability,”

The governor insists a solution must be found with the central bank playing a bigger role to bring about a common approach among commercial banks. He was adamant that central banks in small countries such as Barbados must play a larger role in achieving efficiency in payment systems as well as the regulatory framework related to fees and market conduct.

A significant portion of the CARICOM governors’ meeting was dedicated to financial system issues, with emphasis on payments market developments and opportunities for enhanced regional collaboration.

As countries and the region seek to modernise payment systems and accelerate digital adoption, the governors reaffirmed their commitment to using monetary policy tools to combat inflation, ensure financial stability, and promote efficiency and innovation in financial services delivery.

Recognising the financial system’s competitiveness as crucial to economic prosperity, they also acknowledged common challenges faced by citizens across the region, including opening bank accounts and accessing banking services. They pledged to implement strategies and reforms to address obstacles and improve access.

Going forward, the CARICOM governors’ technical working group on intra-regional payments will engage with the Inter-American Development Bank team on the Fully Scalable Settlement Engine, a collaborative project.

The two-day meeting explored aspects of financial stability and inclusion, including an overview of the regional financial stability report, findings from a region-wide survey on bank fees, and updates on addressing correspondent banking issues.