29 Nov 2004

Marshall Islands Banking Commissioner says termination of agreement would be disastrous

4:42 pm on 29 November 2004

The Marshall Islands Banking Commissioner says the termination of a banking agreement between a U.S. and local bank would be disastrous for the economy.

The U.S. Citizens Security Bank has notified the Bank of Marshall Islands that from February, it will no longer allow it to use CSB routing codes on local cheques making them usable outside the Marshall Islands.

This will mean that Bank of Marshall Island cheques would no longer be acceptable on the US mainland, where many businesses buy products.

The Commissioner, Alfred Alfred Jnr, says he is trying to help find a compromise between the two banks to avoid an economic disaster.

"It'll have a drastic impact, a chilling impact on the entire banking system here as well as the economy. The business industry in the Marshalls does rely on the 'payable through' account to make settlement on their purchases with US companies. US being the major importer."

CSB is also planning to stop providing credit card services that allow for the electronic validation and the transmission of credit card payments for all businesses in the country.