CIMA issues warning over unlicensed offshore bank

(CNS): An offshore financial institution firm claiming to have established a new branch office in the Cayman Islands is not licensed to do business in the jurisdiction, the Cayman Islands Monetary Authority has said. Offshore Banking International (OBI) has issued a press release stating that it reached a new company record last month by opening a branch office in the Cayman Islands, bringing its roster of banking centres to 21 locations. However, CIMA said on Monday morning it does not hold a licence to conduct banking business in or from the Cayman Islands or any other financial services business and it does not know where this office is supposed to be.

CIMA confirmed to CNS that the firm has made no application to the regulator, which is now investigating the claims made in the company’s recent public statement.

“This entity does not hold a licence from the Authority to conduct banking business in or from the Cayman Islands as is required by the Banking and Trust Companies La,” CIMA stated. “OBI is not licensed or registered by CIMA to conduct any other financial services business regulated in the Cayman Islands. The public is therefore advised to exercise caution in dealing with this entity.”

OBI claimed it had established a presence in the Cayman Islands because the jurisdiction had the offshore registration process down to an art.

"We started OBI with the goal of highlighting the world’s lesser known offshore banking capitals," said OBI Richard Collins in a release, which has been circulated on a number of PR wires. "But the Cayman Islands continue to be one of the offshore banking world’s most popular destinations, and we want to give our clients every possible option for their investment portfolios.”

The release said that while OBI is familiar with Caribbean offshore banking centres, it had only added Cayman recently and Collins said he was impressed by the efficiency of the jurisdiction’s banking community.  "I’ve enjoyed developing relationships with our Pacific-based offshore jurisdictions and working through the process," Collins said. "But the Caymans have it down to an art – our clients can complete the offshore registration process in 24 hours."

OBI said the new branch was established to give easy access to new depositors.  "The technology is in place that will allow many people to manage their offshore banking from the privacy of their own home," Collins said. "With everything from document verification to electronic deposits becoming more automated and fraud-savvy, we’re able to offer our clients a wide array of services safely and securely."

The firm, however, did not say where this new office was based or why it had not obtained a licence to do business in the islands. CNS has contacted Collins and is awaiting a response.