Depositors Re-Assured of Security of Savings

Jamaicans have been re-assured that their savings of up to $300,000 are secure in insured financial institutions.
Speaking yesterday (October 4), at the Lions Club of Kingston luncheon at the Jamaica Pegasus Hotel in Kingston, Hughlette Jackson, Director of Insurance and Risk Assessment at the Jamaica Deposit Insurance Corporation (JDIC), explained that there was a rationale for limiting the amount insured per person to $300,000.
The Director pointed out that unlimited coverage would encourage a lack of discipline among both the financial institutions and the depositors themselves. Institutions covered under deposit insurance are the Commercial Banks, Trust Companies, Merchant Banks as well as Building Societies.
Mrs. Jackson noted that the only deposit-taking institution that was not covered under the deposit insurance scheme was the Credit Union. She explained that the deposits which are covered under the insurance scheme are: savings and chequing accounts, time deposits, certificates of deposit, manager’s cheques, money orders and drafts, traveller’s cheques issued by the insured financial institution, capital share, deferred share and a preference share in a building society. Mrs. Jackson informed that deposit insurance was a formal mechanism to protect depositors in case of a failure of a financial institution, such as banks and other deposit-taking institutions.
The JDIC, she pointed out, was established by the Deposit Insurance Act of 1998, as a result of the failure of several financial institutions in the mid 1990s.
“At that time, there was no formal system to protect the banking system and the government had to save the system from collapse. Deposit insurance came about as part of a wider set of reforms to the financial system, to strengthen regulation to ensure that there is not a repeat of the financial crisis of the 1990s. Deposit insurance now offers a structured and predictable way to deal with bank failures.it helps to preserve and promote public confidence in the financial system,” she said.
Outlining the functions of the JDIC, Mrs. Jackson said it was established to manage the Deposit Insurance Scheme. The JDIC is therefore required to provide insurance against the loss of deposits, levy premiums for the Deposit Insurance Fund and fees or other amounts payable in accordance with the Deposit Insurance Act as well as to manage the Deposit Insurance Fund.
Meanwhile, four students from Kingston and St. Andrew Technical High Schools were awarded a grant of $9,000 each from the Lions Club, to assist with their school expenses.
The grant is an annual effort by the Lions Club of Kingston to assist financially challenged students to pay their school tuition as well as to buy text books.