Jamaicans No Longer Trust Banking Sector

April 30, 2020 | By Hopeton O’Connor-Dennie |

Survey shows 33 % Jamaicans have no Bank Account

Finance Minister Dr. Hon. Nigel Clarke has bemoaned the high percentage of applicants for the We CARE programme who lack having a bank account. The people no longer see the banks as a honest broker. This is very clear to even the legally blind.

User Fees

The volume of user Fees, dormant account fees and interest rates are among the many grouses. Why would any Jamaican want to do business with people who seem to cream off more for themselves and leave poor people poorer while they report massive profits to their shareholders each quarter? The banks have not been honest brokers over the years. For example if you encash a cheque for Ja$1000 you could be charged as fee of up to Ja$150. This fee could be higher depending on which bank you go to. Credit card interest for late payment is as high as 49 percent. Should you use your credit card to get a cash advance you could pay a fee of Ja$2000 or even more. It is a crazy system. A financial jungle you may say.

JDIC

Despite legislation in place as an insurance policy (JDIC) a form of deposit taking insurance to protect depositors in event a bank folds.

Banking Services Bill

Opposition MP Mr. Fitz Jackson had introduced a private Members’ Bill which was asking the Parliament to debate bank charges included would be dormant accounts, which the former Junior Minister in the finance ministry and chairman of the PNP found most repugnant if not rapacious. He said senior citizens were hit extremely hard as the bank silently preyed on this vulnerable defenseless persons to eat out their life savings. Unfortunately the government used it’s majority to defeat the bill. So it died a natural death. What a pity!

No Confidence In Banks et al

This lack of apparent confidence by members of the public in the banking sector was glaring especially when the economic assistance to the public referred to as “Compassionate Grant” as a result of C19 is being dispersed here in Jamaica. Most of the successful applicants totalling some 403,000 are opting to have their grants collected by remittance entities instead of having same sent to a bank account. They just don’t trust the banks to not charge exorbitant fees to encash said grant. This puts an enormous burden on the government agency disbursing these grants. This apparent tangled web like outcome should not surprise any. Fitz Jackson must be having a grand laugh.

Perspective

Governments who claim to support the Free Market economic model are most reluctant to regulate markets as they are of the view that competition and market forces will act to cause the market to be self regulated. This concept in theory may be so, but in many cases it does not work in reality. The second view is the government does to want to send any signals which could be interpreted as them being unfriendly to private Enterprise. They may well be indebted in most cases to these banks. It is a form of infectious relationship, you may say. Meanwhile the most vulnerable among us gets the short end of the stick.

Canada Has Good Banking Record …

The Canadian government ensures that banks are well regulated. The ironic thing is these same banks who are well regulated in Canada do as they like overseas. Many of the bigger ones like Scotia Bank and Canadian Imperial Bank, (CIBC) have branches in the Caribbean. They seem to have a field day there taking full advantage of more relaxed policing. Interestingly a Canadian was once governor of Jamaica’s Central Bank.

Hopeton O’Connor-Dennie is Senior National and International Correspondent for Vision Newspaper Canada.