Agriculture Minister to Report to Cabinet on Way Forward for National People’s Cooperative Bank Jamaica Limited

Minister of Agriculture and Fisheries,  Hon. Derrick Kellier, today (Wednesday, September 16) announced that he will be making a Report to Cabinet on the findings of the August 2015 Special Audit, which he had mandated be done on the operations of the National People’s Cooperative Bank Jamaica Limited (NPCB).

The Minister will also report to Cabinet on the proposed measures for the restructuring and strengthening of the financial management and governance of the Bank to protect the interest of thousands of farmers, who rely on the Bank for savings and loan financing support.

Minister Kellier pointed out that based on the information provided by the Ministry-commissioned audit, the Agricultural Credit Board (ACB) has exercised its powers under the Agricultural Credit Board Act and has taken over the management of the NPCB, commencing August 27, 2015. The General Manager was also sent on leave to facilitate further and more detailed audits which are ongoing. An Interim General Manager has been appointed by the ACB.

Today’s announcement by the Agriculture Minister followed a meeting which he convened with senior technical staff of the Ministry of Agriculture, and representatives of the Agricultural Credit Board, the Development Bank of Jamaica (DBJ) and the Department of Cooperatives and Friendly Societies (DCFS), at the Ministry’s Hope Gardens offices in Kingston.

The Minister held the meeting to express serious concerns about the issues affecting the Bank and to discuss the details of the Special Audit. All stakeholders at the meeting agreed on the need for urgent action to deal with the mismanagement at the Bank and the need to protect the interest of the thousands of small farmers who rely on the institution for savings and loan financing services.

In further updates received by the Minister at the meeting, it was indicated that the $665 million referenced in the audit report represented members’ deposits inappropriately used for operational purposes and assets.

Minister Kellier made it clear that while the PC Bank is a members-based institution, which elects its own Board and determines its own management, the existing legislative framework provides for regulatory action by the Agricultural Credit Board, which operates under the auspices of the Ministry of Agriculture and Fisheries. He pointed out that when the matter was brought to his attention earlier this year, in addition to commissioning the Special Audit, the Ministry took proactive steps to provide the PC Bank with additional expertise in the areas of accounting, performance management, institutional strengthening and capacity building. It is also proposed to appoint representatives of the ACB, DBJ and DCFS to the Audit Committee of the Bank.

Minister Kellier said the Ministry and Government are committed to ensuring that the PC Bank operates its business in a financially prudent manner, safeguards the deposits of its members and provides high quality service to the thousands of farmers in Jamaica, among other clients.

He noted that there was significant confidence in the PC bank among farmers and other sectors of the society as seen in an encouraging ten per cent growth in members’ deposits in recent months.