October 28, 2020

Trinidad Central Bank governor fired


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jwala_rambarran3From Caribbean News Now

PORT OF SPAIN, Trinidad — At its weekly meeting last Wednesday, the Trinidad and Tobago Cabinet decided to request the country’s president to terminate the appointment of former Central Bank Governor, Jwala Rambarran, in accordance with sections 12(e) and 12(g) of the Central Bank Act, Finance Minister Colm Imbert said in a statement on Thursday.

That decision is unprecedented in local history, but is preceded in the Commonwealth, by the Jamaican government’s dismissal of Governor Derick Latibeaudiere in November 2009 (over compensation issues) and the February 2014 dismissal of Nigerian governor Lamido Sanusi (for alleging corruption in oil revenues). Cyprus governor Panicos Demetriades resigned in March 2014 after being pressured by the government there, the Trinidad Guardian reported.

The sections of the Central Bank Act cited by the minister allow the president to terminate the appointment of a governor if he “is guilty of misconduct in relation to his duties” and “fails to carry out any of the duties or functions conferred or imposed upon him under this Act.”

It seems evident that the Cabinet formed the opinion — based primarily on legal advice from both internal and external counsel, including senior counsel, according to the minister — “that the disclosure by the former governor of the names of the largest users of foreign exchange in T&T and the amounts of foreign exchange that they used was a breach of section 56 of the Central Bank Act and section 8 of the Financial Institutions Act.”

Those laws impose a duty of confidentiality on all officers of the Central Bank, which is required to maintain the secrecy of information passed to it by Trinidad and Tobago’s commercial banks as the Central Bank serves as banker to the country’s financial institutions and also as regulator and supervisor of the country’s commercial banks.

In other words, in the same way that a bank has an obligation to maintain the confidentiality of a customer’s accounts, the Central Bank must maintain the confidentiality of the information passed to it by commercial banks.

The Financial Institutions Act (FIA), at section 8(1) under the rubric of confidentiality, states: “No director, officer or employee of the Central Bank or person acting under the direction of the Central Bank shall disclose any information regarding the business or affairs of a licensee or any of its affiliates or information regarding a depositor, customer or other person dealing with a licensee, that is obtained in the course of official duties.”

That section makes it clear that Central Bank governors have a duty of confidentiality not to disclose any information obtained in the course of official duties.

On that basis alone, the president could have summarily terminated the appointment of former governor Rambarran.

In seeking to defend the decision by the former governor to disclose the names of some of the country’s main foreign exchange users, the Central Bank published a statement on its website and publicly on December 8.

That statement, which negates the perception that the government did not allow Rambarran the right to be heard, quoted section 8(6) of the FIA.

That section allows disclosure of information that would be in the best interests of the financial system of Trinidad and Tobago or in the best interests of depositors, other customers, creditors or shareholders of such a licensee.

The Central Bank statement, which was drafted no doubt by the former governor, does NOT outline how the breach of confidentiality would be in the best interests of the financial system of Trinidad and Tobago or of depositors, customers, creditors or shareholders of those licensees.

Instead, the statement said the use of Trinidad and Tobago’s precious foreign exchange reserves “is an issue of public concern and justifies the dissemination of the identity of the main recipients to whom such reserves are distributed.”

The Central Bank Act, it must be noted, allows disclosure of information that is in the best interests of Trinidad and Tobago’s financial system or in the “best interests” of licensees. It does not allow disclosure of issues of “public concern”.

In addition, the former governor’s statement ignores section 8(7) of the FIA, which states: “Nothing in this section authorises the Central Bank or any person acting under the direction of the Central Bank to disclose information about a particular depositor or creditor of a licensee, except where such disclosure is required by any written law or ordered by the court.”

It should be noted that contravention of section 8 of the FIA is an offence for which the offender “is liable on summary conviction to a fine of $600,000 and to imprisonment for two years.”

The Central Bank statement of December 8 also sought to defend the former governor by quoting the Central Bank Act at section 56 (1), which states: “Except in so far as may be necessary for the due performance of its objects, and subject to section 8 of the FIA, every director, officer and employee of the Bank shall preserve and aid in preserving secrecy with regard to all matters relating to the affairs of the Bank, any financial institution…or of any customers thereof that may come to his knowledge in the course of his duties.”

The December 8 statement by the Central Bank also ignores the Exchange Control Act, Section 44 of which states: “No person who obtains information by virtue of this Act shall disclose that information otherwise than in the discharge of his functions under this Act or for the purpose of any criminal proceedings; but nothing in this subsection shall apply to information lawfully received by a member of the public in the course of an ordinary transaction between such person and the Bank.”

In a statement, opposition leader Kamla Persad-Bissessar described Rambarran’s firing as victimization and entrapment, and a continuation of the victimization since the present People’s National Movement (PNM) administration took office.

“The action against Mr Rambarran has the hallmarks of PNM victimization that we have seen in previous years against people like a former Speaker of the House of Representatives and a former chief justice. And it is a continuation of the victimization that has been taking place against citizens since the present Rowley PNM administration took office,” she said.

Persad-Bissessar claimed there were two principal issues that led to this unfortunate interference in the Bank’s operations – the decision by the governor to announce that the country was in a recession and Rambarran’s release of information stating the names of the companies that are the largest consumers of foreign exchange.

Both issues offended the government, she said, and at least one of the companies named as a big foreign exchange user has indicated its intention to take action against the bank for releasing such data. And the Bankers’ Association of Trinidad and Tobago (BATT) stated that the release of the information was “a breach of confidentiality of information that is supplied to the CBTT by the commercial banks.”

“However, the opposition notes that Mr Rambarran made the disclosure only AFTER Finance Minister Colm Imbert asked the Central Bank to provide information on how the recent release of foreign exchange was distributed and indicated that such information would be made public.

“This appears to be a case of entrapment, where the government clearly tried to set up the governor with the request for information, which the governor provided,” Persad-Bissessar asserted.

Rambarran said on Friday he was not given a fair hearing before he was fired from his position last Wednesday and will now seek legal recourse.

In a two-page statement issued two days after his appointment was terminated and revoked, Rambarran also took issue with the Cabinet’s decision to make the recommendation to acting president Christine Kangaloo that his employment be terminated given that President Anthony Carmona is on vacation.

IMAGE: Jwala Rambarran

For more on this story go to: http://www.caribbeannewsnow.com/topstory-Trinidad-Central-Bank-governor-fired-28800.html

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