Legislation passed to modernize banking operations in Jamaica

golding-bankruptcy-640x425KINGSTON, Jamaica, Thursday October 1, 2015 – The Senate has approved a Bill which seeks to modernize the regulatory framework within which banks operate in Jamaica, including giving them more freedom to decide how long they are open for business.

The Banking Services Act amended and consolidated the existing Banking Act, Financial Institutions Act and sections of the Building Societies Act, into one piece of legislation which has regulations that deal with the opening hours; establishment of branches; licence fees; amalgamation and transfers; capital adequacy; deposit taking institutions; and licence application rules.

One of the fundamental changes is that financial institutions will have the flexibility to open and close their doors as they see fit, as long as the institutions are open to the public for at least 25.5 hours per week.

However, they are to remain closed for business on public holidays, with the exception being branches that operate at the two major international airports.

Piloting the Bill, Minister of Justice Mark Golding said it seeks to substantially update the existing regulations and set out the basic operating requirements for the deposit taking industry.

“It also includes specific updates that are required to facilitate the industry’s transition to the framework under the Banking Services Act and are therefore considered critical in order for the Act to be brought into effect,” he said.

The minister further noted that the regulations would ensure that the country’s deposit-taking institutions operate in accordance with modern international standards, “and which can support the levels of investment that an economy that is poised for growth requires.”

Golding said passage of the regulations ensure that the principal Act will be brought into effect, adding that it was one of the fundamental pieces of legislation that was passed in 2014 as part of the overall restructuring of the economy, under the current International Monetary Fund (IMF) agreement.

Senator Imani Duncan Price said the comprehensive regulations were critical in a sustainable economy.

Regarding the issue of opening hours, which the regulations address, she said it would enable financial institutions to better meet the needs of Jamaicans.

“With so many persons working in regular hours, they are unable to explore financial planning options after five o’ clock. It goes with the flexi-work arrangements recently passed by this House, where, in fact, based on what people are doing (and) based on their day to day productive lives, they can then partner with relevant institutions at a time more suitable to them, to ensure their own financial security,” Price said.

Opposition Senator Kavan Gayle agreed the amendments would allow for more effective supervision of the financial sector.

“These regulations that are put in place are there to protect also the customers, protect the depositors, and even protect the workers that are involved,” he said.

The regulations were passed in the House earlier this year.

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