The Trinidad Co-operative Bank
The Trinidad Co-operative Bank (TCB) was incorporated in 1914 as a savings institution “to inculcate in the people virtue of thrift…and to provide a quick, easy, safe means for children and poor people to save …” In 1974 Sir Ellis Clarke, the then Governor General articulated “Essentially, the Bank stands as a monumental refutation of the many slanders of our people so readily inherited and glibly disseminated.”
Unlike the other Banks which accepted no less than a shilling (24 cents) to open an account, the Bank encouraged depositors to open accounts with as little as one penny. In this way, the bank became known as the Penny Bank. In those days the penny had some buying power and could even buy a treat.
During the 1920s, the Penny Bank shared the landscape with three foreign-owned banks. In the 1930s and 1940s, banks concentrated on consolidating and showed no signs of growth and expansion. But the next decade saw unprecedented growth in the economy and the banking sector.
On February 21, 1986 the Central Bank took control of the Penny Bank. The Inspector of Banks had conducted an investigation the previous year which led to a devastating auditor’s report by Price Waterhouse in January 1986. The Central Bank removed most of the Board of Directors and appointed a new CEO.
Under its new management, the TCB showed some recovery. The Bank reported a profit of $2.8M in 1991 and eliminated its accumulated deficit by selling properties and moving liabilities off its balance sheet.
In 1991 the Central Bank told TCB that it was in violation of Section 16 of the Banking Act, which stipulates that no bank should incur deposit liabilities of an amount exceeding 20 times its paid-up capital and reserve fund.
To maintain liquidity in 1993, TCB resorted to inter-bank borrowing and was frequently unable to make any of the required reserve deposits with the Central Bank.