Man raises questions about banking system

SM
By Sapeer Mayron, 07 January 2019

A man has raised questions about the treatment of bank drafts from far away places like Canada by the local commercial banks. 

Harvey Ash came to Samoa to bury his wife, who passed away on 30th November 2018, in Canada.

The journey to Savai’i in December was about fulfilling his promise to her, to bury her alongside her brothers and parents.

He told the Samoa Observer it was in her last wish for the funds of her Canadian estate, where they had lived, to be distributed among her family members.

To honour the obligations of the fa’alavelave, Mr. Ash issued several bank drafts from the Royal Bank of Canada before arriving in Samoa – thinking they would be more reliable than personal cheques.

But once in Savai’i, Mr. Ash and his family quickly discovered the money would be difficult to access.

 “We visited three or four banks on Savai’i and all of them said it’s not their policy to honour government draft,” Mr. Ash said. “One bank told me I would have to wait six weeks to send the cheques to Canada where the source was to get it okayed and returned.”

Mr. Ash said the biggest disappointment was that his family should already have this gift from his late wife, not having to potentially wait six weeks for it.

“I think this is a great disservice to Samoan people,” he said. “It’s not a personal cheque; it’s honoured by the government of Canada. 

In today’s modern age where they couldn’t send an email and get an answer back in a few hours, there is something very wrong to me.”

Bank drafts are like prepaid cheques. One buys them from the bank, so there is no risk of the cheque not clearing. 

Mr. Ash ensured each cheque was made out to each family member in their name, from the estate of his wife’s account. 

“These cheques are all written to family members and it does not even have my name on this, because I paid the bank for these and the bank is the one that issued the cheques. 

“It is so hard for me to understand why Samoan banks won’t honour these cheques… it was supposed to be a gift from my wife at the funeral time.”

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According to the National Bank of Samoa, Samoa Commercial Bank, ANZ Samoa and Bank South Pacific, accepting cheques or cash from Canada is problematic, and recently it has become company policy not to do so.

John Kaisa, Head of International and Trade Finance Services at Samoa Commercial Bank (S.C.B) said Canadian dollars is hard to move, because there is low demand for it in Samoa.

“We don’t deal with Canadian money yet, because it gets stuck in our system for ages,” he said.

S.C.B also doesn’t have any correspondent banks in Canada or the United States to shift the funds to if they don’t get used here in Samoa. 

According to Mr. Kaisa, this is a Pacific wide issue.

“But we are working with the Asian Development Bank to get those relationships with American banks back, and dealing with the Central Bank with help with policies to put them in place,” he said.

The National Bank of Samoa (N.B.S.) used to accept international bank drafts like Mr. Ash’s from Canada, but the lengthy process caused it to stop. 

“It takes a month for cheques to be sent back to their source for clearance, because they have to be couriered,” said a bank spokesperson.

Head of Retail Banking for Bank South Pacific, Shirley Pauga, said the six weeks waiting time is unavoidable, as is the posting of cheques back to Canada. 

“Yes, we accept international bank drafts and it takes up to six weeks to clear the cheque,” she said. “Generally, all international bank drafts must be cleared for payment and this is not unique to Samoa. This process requires the bank drafts to be sent to the issuing banks and it takes up to six weeks, depending on the location, to clear the bank drafts and remit funds.”

Ms. Pauga said she did not imagine emails or phone calls would replace the mail system anytime soon, as the actual cheque has to be received by the issuing bank to get clearance.

For Mr. Ash, this leaves around ten cheques made out to his wife’s family members, adding up to CAD$6,500 (T$12,700) uncashed, which according to the Royal Bank of Canada website, cannot be refunded.

The website reads: “R.B.C is not able to cancel or stop a Bank Draft. If lost or stolen, a replacement or refund will need to be requested, and a Bond of Indemnity may be required from the purchaser.”

Mr. Ash said he’s concerned he won’t be able to contribute fairly to the costs of the funeral, at least in good time.

Calling the six week waiting time “basically wrong” and ridiculous, Mr. Ash said he hopes the policies will change soon.

“That’s the reason I came to the Samoa Observer, to hopefully improve matters for people in the future. It’s a little late for me now but hopefully I can improve the situation for others.” 

SM
By Sapeer Mayron, 07 January 2019

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