Everyone in the Netherlands is entitled to a bank account. Well, almost everyone. Banks are withdrawing on a large scale from the Dutch municipalities Bonaire, St Eustatius and Saba. The last one is Rabobank. The proceeds would no longer outweigh the hassle that banking in the tropical Netherlands entails.
Rabobank is winding down its activities on the island. Bank customers on Bonaire recently received a letter from Rabobank on their doorstep: the bank is phasing out its services.
Residents of the BES islands have been complaining about the substandard services provided by banks since they became a special Dutch municipality in 2010. That hasn’t helped anything yet: the Ministry of Finance is coming up with a task force to ensure improvement.
‘How are the banks doing here? From bad to worse.’ As president of the Saba Business Association, Alida Heilbron is involved in a continuous battle with the banks, Dutch politicians, and regulators. Her goal: a decently functioning bank, or two, on her island. So far, her letters and conversations seem to be counterproductive.
Instead of adding bank branches or ATMs, Saba’s only customer-friendly bank recently left. Accounts of its customers were transferred unsolicited to another bank, with a head office more than eight hundred kilometers away, on Bonaire. ‘So now I suddenly have a bank account on another island.’ This results in almost unreal situations. ‘I have a mortgage, but my new bank doesn’t show mortgage statements online. They also did not want to send it. For example, if I wanted to know my residual debt, I had to come to their st. Eustatius branch myself. How should I do that? Take the plane?’
The current banking no man’s land came into being on 10 October 2010, when Bonaire, St. Eustatius, and Saba became special municipalities of the Netherlands. The branches of banks on the BES islands with headquarters on Sint Maarten and Curacao closed: the number of customers was too low, and the costs too high. Despite countless promises, meetings, parliamentary questions, visits by Dutch politicians and the obligatory investigation of PWC, things have only deteriorated since then.
This is also the case on Bonaire. There, several residents recently received an unpleasant surprise from their bank on the doormat. In a letter to customers, Rabobank reports that it is winding down its activities on the island. Bank accounts are not just closed, but those who want to add their partner or change their mortgage must find another bank. No additional product can be purchased. The decision leads to a fuss among account holders. Bonaire is – just like Saba and St. Eustatius – a Dutch municipality. Admittedly one with its own flag, and without euros, but the island really falls under the Netherlands. The Dutch Electoral Act applies and residents vote in the European elections. Education on Bonaire is supervised by the Dutch Education Inspectorate and the banks by De Nederlandsche Bank.
Had Rabobank closed the account holders of any other Dutch municipality with a similar population – say Alblasserdam, Baarn or Bloemendaal that would have led to a riot. However, we hear almost nothing about the banking desert on our islands. And that while it does not stop at Rabobank. Because ING and ABN Amro are also doing less and less business in the Caribbean. Remarkably, it rarely comes to lawsuits.
Rabobank says that the intervention only affects a small number of customers. That makes sense: in total, there are about 26,000 people living on the BES islands. The bank says it sees the islands as a kind of ‘foreign country’. Different rules apply there, the spokesperson emails. ‘This also applies to all the BES islands, despite the fact that these islands belong to the Netherlands.’ The spokesperson says he understands that the message is not nice, but guarantees: ‘we will continue to serve existing customers’. ‘Transfers from Curaçao to the Netherlands take days, we often can’t afford that.’
For the Rabobank, the BES islands are treated in the same way as Aruba, Curaçao, and Sint Maarten, which, indeed. Are different countries in the Kingdom. Understandable from the perspective of the banks. Banking abroad means: greater risks and higher costs. Already in 2016, the bank, which is experiencing problems in the Netherlands with its money laundering file, closed its office in Curaçao. The bank now says it is still doing more than necessary. ‘We treat existing customers on Bonaire the same as customers within the European Economic Area.’ The bank is supported in this by a recent ruling by the financial disputes committee KiFiD.
“We had hoped that banks would take into account the status of the Caribbean Netherlands as part of the Netherlands,” says the finance spokesman. The ministry states that it cannot force banks. ‘The right to a basic payment account does not apply to residents of the Caribbean Netherlands.’ The issue is also on the agenda of the Ministry of the Interior and Kingdom Relations. The spokesman calls the developments ‘worrisome’. ‘We see that banking services in the Caribbean Netherlands too often do not meet what customers can expect from banks. This has consequences for citizens and entrepreneurs. One of the consequences is that the Dutch taxpayers need to provide more subsidies to the BES islands than would be necessary with a better-supported economy.
Something must change.’ The Ministry of Finance has frequent consultations with the banks. According to Sabaan Heilbron, politicians, supervisors, and bankers also regularly come to see for themselves how things are going there. The Ministry of Finance is now also participating in a ‘task force’ to improve banking services in the Caribbean Netherlands. The first findings will be published in March 2023.
This working group, an initiative of the State Secretary for Kingdom Relations and Digitisation, also includes someone from De Nederlandsche Bank. He says he is bound with hands and feet. ‘We have no powers with regard to payment transactions on the BES islands.’ Banks are allowed to decide for themselves how they set up their services, which also includes the cancellation of payment accounts. The regulator says it is in close consultation with the Payments Association, the Ministry of Finance, and the Ministry of the Interior and Kingdom Relations to solve the bottlenecks in banking services.
So far without result, law firm Vaneps discovered. The office is active in all regions of the Caribbean part of the Kingdom of the Netherlands, but also has a branch at the Amsterdam Zuidas and is neatly registered with the Dutch Chamber of Commerce. Despite the clear Dutch link, ABN Amro canceled its branch account in March 2021. The lawyers didn’t leave it at that. The first lawsuit was won. The appeal proceedings were in favor of ABN Amro, now another appeal will follow, says Roderik van Hees from Curaçao. As far as he is concerned, it is clearly stated in the Wft (Financial Supervision Act, ed.): ‘The right to a bank account applies to everyone who is lawfully resident in the EU.’
‘Our status is indeed special, but very different from what we had thought’ Alida Heilbron, Saba Business Association. Van Hees has not yet been able to discover much logic in the overseas policy of dutch banks. ‘ABN initially wanted to cancel the accounts of many private individuals in Curaçao and Sint Maarten, but later withdrew that cue after there was a fuss about it in the media and politics.’ He refers to France, where the right to a bank account for private individuals, regardless of their place of residence, is enshrined in law. In the Netherlands, the CDA and D66, among others, are pushing for such a law. As long as there is no such thing and lawyer Van Hees is not proved right by the judge, his office will continue to rely on what he calls a ‘Mickey Mouse account’ for payments in euros: a bank account in Antillean guilders that are converted into euros from day to day. ‘As a result, the balance fluctuates continuously.’ This has all kinds of practical economic consequences for the office. ‘Transfers from Curaçao to the Netherlands take days, we often can’t afford that.’
Van Hees does not give up, nor does the administration of the islands. At the end of last year, the Island Council of Saba sent a letter to the then Minister of Finance Hoekstra, containing a long list of pain points. There is no Dutch bank to be found on Saba, for opening a bank account at the last local bank, with headquarters in St. Maarten (that is “abroad”) the waiting time is about six months. There are complaints about legal inequality, such as a difference from Europe in the deposit guarantee scheme. In another letter, it goes further: the island still has one bank branch, from RBC, and one ATM from another bank, paid for by the local government That costs the island 100,000 dollars a year. . Alida Heilbron of the Saba Business Association is sometimes despondent. ‘In 2010, the Dutch welcomed us as a “special” municipality. That was smart of them. Our status is indeed special, but very different from what we had thought.’