How Our Banking System Dis-serves the Poor

By Dr Selwyn R. Cudjoe
January 02, 2020

Dr. Selwyn R. CudjoeThe issuance of the polymer $100 bill and the hardships it caused many citizens should make us realize how the banking system discriminates against the poor and looks down on them for having created an alternative financial system that serves their needs.

The Trinidad Express, in an insightful editorial, offered a useful history of banking in this country. It cautioned: “It is in the interest of the national economy and social harmony that policy makers and bankers understand T&T’s culture of savings and design instruments appropriate to them instead of demeaning them and pushing them underground.” (December 19).

While the Express attributes the exclusion of the West Indian masses from the banking system to the elitism of the dominant class, I argue that the banking system was not created to serve the needs of the poor. It was established primarily to facilitate the financial activities of the planter class.

The compensation that was paid to the former slave masters introduced more money into the banking system. As more wage workers entered into the economy there was a greater need to strengthen the banking system (hence the establishment of the Colonial Bank in 1837) to facilitate a smoother transition from an economy based primarily on allowances (paid to the enslaved) to one based on wages to the freed blacks.

C. A. Calvert, secretary of the Court of Directors of the Colonial Bank, warned William Rennie, manager of the Trinidad branch of the bank: “It will be necessary in the first instance to divest yourself of the idea of supplying what are called ‘the wants of the community’ or of completely filling the void occasioned by the fall of the West India Bank” (Margaret Rouse-Jones, The Colonial Correspondence, 1837-1885).

On June 1, 1850, the Legislative Council met to consider the introduction of smaller coins into the financial system to facilitate transactions of “the lower order.” The larger coins, the stampee or black dog and the quarter franc pieces in existence were not adequate to the needs of their transactions. The government, therefore, sought to introduce smaller coins, the coppers, to pay salaries and to facilitate market transactions.

Initially, the planters were skeptical of the use of the coppers (farthings, cents and pennies) into the financial system. William Burnley, head of the planter class, thought it unwarrantable and impudent of the banks to force these coins on the public.

He argued that the introduction of the coppers “had no other object in mind than to sweep away our Mexican dollars, they had gone down with the doubloons and other gold pieces, as to monopolize the currency of the island.” Rennie, an unofficial member of the Legislative Council, disagreed with Burnley. He encouraged “throwing into circulation a description of coins which in other British colonies were much valued, and had always answered the wants of the laboring population” (Trinidadian, June 3, 1850). He assured the Council the copper “would create confidence, allay the alarm in the community, and the petty shopkeeper would not hesitate to take it.”

Ultimately, Burnley gave way to those who favored the introduction of smaller coins. He admitted “the copper coins now introduced were quite small enough to enable the lower classes to obtain the minutest requisite, and would be the smallest article of consumption which the smallest appetite could think necessary.

“It only remained to do something to prevent any practical inconvenience in the higher classes, and that is to be done by limiting the circulation of British silver” (Trinidadian, August 24.) The British silvers consisted of the twelve (1 shilling), twenty-four (2 shillings), and sixty (1 crown) pence coins.

The introduction of the copper brought the poorer classes into the economy and, to that degree, acknowledged their importance to the economic life of the community. Since the official banking system never catered to their economic needs, the poor created their own system which, according to Asha Javeed, has grown to be about 30 percent or about $47 billion dollars of T&T’s real Gross Domestic Product.

When yours truly left for the United States in 1964, it was my mother’s sou sou hands that allowed me to do so. When my uncles and cousins played whe whe, it was another means of generating some cash to deal with the demands of the day. Although I had a small savings account at the Cooperative Bank in Port of Spain, I never had a checking account until I arrived in the US.

In order to survive, the poorer classes turned to their own ingenious means of savings to facilitate their growth. It is unfortunate that contemporary bankers should speak disparagingly of their historic modes of savings. It tells us how little we have learned from our past and the desire of the rich and powerful to freeze poor people into the same exploitative relationship they cultivated with our forefathers and foremothers.

The banks still cater to the needs of the rich and continue to dis-serve the poor. Five years ago I tried to borrow $250,000 (TT) to purchase a plot of land in my village. Although I had sufficient collateral, I spent a month running from one bank to another which was futile in the end. It was a waste of my time and energy.

I applaud the Express for shining a light on the dark corners of our banking system and its advice that the latter improve its service to the poor. Our scholars need to examine the origin of this historic injustice which I try to do in my book, The Slave Master of Trinidad.

9 thoughts on “How Our Banking System Dis-serves the Poor”

  1. Selwyn Cudjoe writes about the treatment meted out to the poor by the banks in Trinidad and Tobago and he further opines, “Our scholars need to examine the origin of this historic injustice…” Indeed they should, it is an important area that would shed light on much of our present sociological condition. Banking really came into its own after emancipation. “In the plantation system as it obtained in the colonies prior to the abolition of slavery, there was little need for money. Food, shelter and clothing were provided by the plantation… Transactions between plantations and Europe were handled in the main by Bills of Exchange and book entries. The merchant-banker in London or Marseilles would provide ships to bring for example sugar from Trinidad, then sell the cargo in the foreign market. From the proceeds, he would pay the planter’s commitments like pensions and mortgages in Europe, buy goods for him and send it back on a ship to Trinidad. No cash was involved in the transaction at all.” Gerard Besson – History of Banking. It was only after emancipation that planters needed cash to pay for labour and other necessities. Former slave owners were compensated for the loss of their slaves. Slaves got nothing. They wanted to get away from the plantations and the history of oppression and dehumanization. They hoped to get a little plot of land in order to plant their own food, and to establish their own communities. The plantocracy would have none of this. After emancipation there was the notorious “Apprenticeship” period. After that former slaves just wanted to get out of the plantations. In an attempt to get former slaves back to the plantation, the plantocracy made it a policy to make it difficult for former slaves to own land, banks were discouraged from lending to former slaves; not being able to get loans and discouraged from owning land, former slaves ended up in crowded barrack yards, in ghettoes, around the area of Laventille. That has been the history of ownership of land by blacks in Trinidad. When you see the map of Trinidad after the LGE, did you notice how PNM were crowded in certain areas in the north and in other miniscule urban areas? That is a consequence of the policy to prevent ex-slaves from owning land and attempting to get them back to work on the plantations. And did you notice how UNC regions seemed to occupy most of the land in Trinidad? There is also a reason for that. Indentured servants were brought in from India to replace slave labour. They were offered five acres of land if they agreed to stay in Trinidad after their contract ended. Most accepted. So while former slaves were discouraged by policy from owning land, Indian indentures were given land if they stayed in Trinidad. Five acres is worth now on the average several million dollars. Land was also useful collateral in obtaining loans. There is a saying with reference to banks in America – banking while black. Many blacks have been kept in a state of poverty because of the policies of banks. They are victims of banking while black. There is much more for our “scholars” to examine about the origin of this historic justice. Hopefully some may take up the challenge.

  2. Oh Professor, * The banks still cater to the needs of the rich and continue to dis-serve the poor. Five years ago I tried to borrow $250,000 (TT) to purchase a plot of land in my village. Although I had sufficient collateral, I spent a month running from one bank to another which was futile in the end. It was a waste of my time and energy.*

    If that could happen to a former Central Bank of TT board member?
    I ever tell yuh how they literally screamed at me in the CB as a teenager… in front of everybody, “Yuh going and buy ting in America and bring back and sell”.. No wonder Chee Mooke has to wear a Chinese mask as an African Businessman.. Trinidad is a mother-shut your mouth! But Professor, are we just going to talk talk and not press for Banking Reform Reform legislation for the young teenage entrepreneurs?
    Have a Great New Year, Professor..

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  4. Professor I want to commend you for highlighting a topic which is much needed in Trinidad and Tobago. The Banks are being aided and supported in the exclusion of the poor workers of the country by the Ministry of Finance, The FIU and the Central Bank. I know many young Afro men working in construction who earn money but are unable to put it in the bank because of the barriers and policies of the banks and the FIU’s ridiculous paperwork and other requirement to open a bank account. They ask for utility bills and job letters etc and other documentation which are difficult for the small man to acquire. All done under the guise of controlling money laundering etc. Towing the line of the international agencies who dictate what our country should do in our financial regulations. Our Prime Minister and Min. of Finance are the puppy dogs of these organisations. These are the reasons why people do not deal with the banks. Too much harassment. Banks are now gouging the normal consumers by giving us a pittance of 1% interes then charging 9-12% in lending our money. Also banks are raping the consumers by charging a sort of fees. A little bit of money in the bank is stolen through high monthly fees. Also banks do not have an adequate branch network to serve the people. The average time to do a simple transaction in a TT bank can run more then 3 hours. Also bad service and bad manners of bank workers. It seems this is modern slavery.

  5. Note: North Americans can open bank accounts online without all the BS with requirement of Utility bills, job letters etc. The biggest money laundering is happening in countries such as Canada. The international organisations are not making these North American countries implement all the barriers and policies to open a bank account as in Trinidad and Tobago.

  6. If you are a poor man and you go to the bank wanting to deposit $2000. The cashier there with 3 GCE O Level will subject you to some kind of interrogation. I remember going to the bank standing in a long line waiting to do some foreign exchange, I was subjected to the humiliation nearing the scale of a black man being called “boy”. After much back and forth I got the money. Well I don’t waste time with the bank anymore. I go to the jewel shop or some friends and get a better rate. I don’t have to go through the embarrassment of being looked upon as a “thief”.

    In Canada and US banks are slowly moving away from personal banking. Most banking (paying bills, buying etc) are now done online. You go to the bank there is at least two instant tellers and a few banking personnel around to service your needs. No lineup to see a cashier.

    What the bank have today is electronic money meaning they don’t have to have the same level of cash. The change over from cotton to polymer was design by the government to impute the maximum amount of stress on those who have money at home or in their business. Through the exercise anyone who brought in more than $20,000 will be receiving a notice to “explain your wealth”. It is a clever way to play police, with the citizenry. If you have years of savings well you can count that loss.

    If you are rich like the Syrians you can buy your own bank. They did that in December purchasing the Bank of Baroda. That way they don’t have to subject themselves to the scrutiny of locals. They don’t have to answer any irritating questions! Who in the 1% would want that!

    The government has been mummyfied into silence by the elites. They are running the show, creating an anti citizenry system. A system that serves their interest. The long lineups by seniors, elderly and weak citizens is the reminder the colonialism is alive and well.

    If you have legal tender then the bank should honor it instead of giving your private information to some government officials who in turn will subject you to the humiliation of a black man being stretched over his back bare and Massa whipped bearing down on his already “plowed” skin. Time to end the madness!

  7. The national debt is a staggering $120 billion plus. In 2015 the debt was $57 billion. KPB added $25 billion to it but she also added $32 billion to Forex and Heritage Fund. Since then the Central Bank overdraft by the Engineer turn Finance minister is over $41 billion (last year). Last year He brought in a budget for $53 billion whilst the national income is now $43 billion. I guess he will borrow another $10 billion to accommodate the short fall.

    To add insult to injury Petrotrin was closed divided up into several companies. Now the mothball refinery is being restarted. The Minister of Finance said Petrotrin was operating at a loss (questionable). All those Caribbean nations purchasing Petrotrin products simply found other markets, including the Bajans who are now US customers.

    What role does the banking system play in TnT. It may surprise you to know the Central Bank does not work for the nation…Take a look at this YouTube video exposing the banking system in America. Similar to this nation.

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  9. It’s hard to establish exactly when the first banks appeared, and they could be older than currency. Texts surviving from about 4000 years ago mention laws governing financial services. That’s a sign banks were already important enough to need regulating. Services varied in different parts of the world.

    In 2000 BC, Babylonians could deposit gold at temples for a fee, which was then lent to other people at interest.

    The Romans began to move away from using temples in 352BC, forming the first simple public bank. Roman banks were pretty similar to the ones we use today. They didn’t last. With the collapse of the empire, banks disappeared from Europe until the Middle Ages.

    In the 12th century, Jewish people in Italy started offering grain loans. Farmers could borrow grain, they repay it at interested after harvest.Profitable and useful, banks soon took off.

    The first national bank opened its doors in Venice in 1157. The first bank failures happened a century later.

    Our modern banking system was in place by the 17th century. If you went back in time 300 years, you’d probably find the banks recognizable. They accepted deposits, transferred money, made loans and followed strict government regulations. The basic structure of banks hasn’t changed much since then.

    The banks in TNT has become less user friendly. Instead of expanding their services across the nation, you have to go to the town area to find a bank. The bank at the end of the month is filled with long lines of the elderly going to access their account. Then there is the not so friendly teller who looks at you as though you are a criminal. Plus the service charges keep increasing.

    What makes people angry is the staggering profit the banks makes at the end of the year or the quarterly reports. They don’t exist to serve the citizenry, they exist to full their pockets.

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