BANKING SYSTEM OF GRENADA

The countries of the Eastern Caribbean have highly integrated economies and financial sectors. The Organization of Eastern Caribbean States (OECS) is a regional grouping of the island economies, comprised of Anguilla, Antigua & Barbuda, Dominica, Grenada, Montserrat, St. Kitts & Nevis, St. Lucia and St. Vincent & The Grenadines. OECS members have highly integrated economies and financial sectors, with a common currency under the Eastern Caribbean Currency Union, and a common central bank, the Eastern Caribbean Central Bank (ECCB).
In Grenada, offshore banks are regulated by the Grenada International Financial Services Authority (GIFSA). Financial sector legislation was strengthened in 2001, and the Grenada International Financial Services Authority was brought under stricter management. An amendment to the GIFSA Act (No. 13 of 2001) eliminates the regulator’s role in marketing the offshore sector. GIFSA makes written recommendations to the Minister of Finance in regard to the revocation of offshore entities’ licenses and issues certificates of incorporation to IBCs. In the future, GIFSA is expected to assume authority for regulating both onshore and offshore institutions, in some areas sharing supervision with the Eastern Caribbean Central Bank (ECCB). It is expected that GIFSA will be renamed the Grenada Authority for the Regulation of Financial Institutions. Overall supervision of the banking sector in the OECS is provided by the Eastern Caribbean Central Bank (ECCB). Grenada's domestic banking sector consists of six commercial banks, 26 registered domestic insurance companies, two credit unions, and four or five money remitters.

In September 2001, the Financial Action Task Force (FATF) placed Grenada on the list of noncooperative countries and territories in the fight against money laundering (NCCT). The FATF in its report cited several concerns: inadequate access by Grenadian supervisory authorities to customer account information, inadequate authority for Grenadian supervisory authorities to cooperate with foreign counterparts, and inadequate qualification requirements for owners of financial institutions. In April 2002, the U.S. Department of Treasury issued an advisory to banks and other financial institutions operating in the United States, to give enhanced scrutiny to all financial transactions originating in or routed to or through Grenada, or involving entities organized or domiciled, or persons maintaining accounts, in Grenada.
The Grenada International Financial Services Authority commenced operations in January 2000 in order to monitor the operations of offshore companies and the International Financial Services Bill was enacted in October 2001 to combat money laundering.
Like those of many other Caribbean jurisdictions, the Government of Grenada (GOG) raises revenue from the offshore sector by imposing licensing and annual fees upon offshore entities. Grenada is reported to have over 20 Internet gaming sites. There are also about 900 international business companies (IBCs).
Grenada’s efforts to put into place the legislation and regulations necessary for adequate supervision of Grenada’s offshore sector prompted the FATF to remove Grenada from the NCCT list in February 2003. The Department of Treasury also lifted its advisory on Grenada in April 2003.

Eastern Caribbean Central Bank
The Eastern Caribbean Central Bank (ECCB) was established in October 1983. It is the Monetary Authority for a group of eight island economies namely - Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines. The mission of ECCB is to maintain the stability of the EC dollar and the integrity of the banking system in order to facilitate the balanced growth and development of member states. The monetary arrangements are characterized by :
- the issuance of a single common currency, the flow of which is unrestricted among its members.
- a common pool of foreign exchange reserves; and
- the existence of a Central Monetary Authority which decides on the Union's monetary policy.
The purposes of the Bank are:
- to regulate the availability of money and credit;
- to promote and maintain monetary stability;
- to promote credit and exchange conditions and a sound financial structure conducive to the balanced growth and development of the economies of the territories of the Participating Governments;
- to actively promote through means consistent with its other objectives the economic development of the territories of the Participating Governments.
The governing bodies of the Eastern Caribbean Central Bank are the Monetary Council and the Board of Directors. The Monetary Council is the highest decision making authority. It is comprised of one Minister appointed by each Government of the participating countries. The function of the Council is to provide directives and guidelines on matters of monetary and credit policy to the Bank. The Board of Directors is comprised of ten Directors - the Governor and Deputy Governor, and one Director appointed by each Government of the eight participating countries. The Board of Directors is responsible for policy and general administration of the Bank, while the Governor, the Chief Executive, is responsible for the day-to-day management and operations.

Financial Institutions Operating
Some of the banks operating in Grenada:

- Bank of Nova Scotia
- First Caribbean International Bank (formerly Barclays Bank Plc).
- RBTT bank
- Grenada Co-operative Bank
- Grenada Development Bank
- National Commercial Bank of Grenada.