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Story Highlights

  • The Senate on Friday, June 13, approved the Banking Services Act, which will regulate the country’s financial institutions, including the Bank of Jamaica (BoJ).
  • The Bill is a key reform to the country’s suite of financial sector laws that govern the deposit taking sector.
  • The Bill repeals legislation such as the Banking Act, the Financial Institutions Act and the Bank of Jamaica (Building Societies) Regulations.

The Senate on Friday, June 13, approved the Banking Services Act, which will regulate the country’s financial institutions, including the Bank of Jamaica (BoJ).

In piloting the Bill, Minister of Justice, Senator the Hon. Mark Golding, said the Bill is a key reform to the country’s suite of financial sector laws that govern the deposit taking sector.

He also noted that the Bill repeals legislation such as the Banking Act, the Financial Institutions Act and the Bank of Jamaica (Building Societies) Regulations.

“The Bill seeks to move the framework for banking businesses closer to governing international standards in this area, namely the Basel Core Principles on effective banking supervision,” Senator Golding said.

He pointed out that the Bill will incorporate new and emerging areas that are particular to Jamaica’s financial system, adding that the law proposes changes to the Bank of Jamaica Act, which serves to alter the mode of appointment of the supervisor of Banks and financial institutions.

“He or she will now be appointed by the Governor-General, on the recommendation of the Minister, for a term not less than seven years,” Senator Golding said.

He informed that the Bill will not be brought into effect until the accompanying Regulations are approved.

In his remarks, Senator Lambert Brown, welcomed the passage of the legislation, and added that the regulation of banks provide for more protection for the consumers.

However, Senator Brown called for amendment to Clause 126 of the Act, which requires deposit taking institutions, which have unclaimed moneys for a period of 15 or more years, to hand over same to the Government.

The Senator said currently banks can declare accounts dormant after a period and then they start withdrawing from the account.

“So, when the Government comes and put this clause to say after 15 years the money must go to the Government, what we must do now as we review the Bill is to amend this clause to say to the banks, you cannot take out money out of the depositor’s account.  The deposit must stay there and it must follow what clause 126 says it must do after 15 years of dormancy,” he emphasized.

Senator Marlene Malahoo Forte welcomed the passage of the legislation, stating that it was “long in the making and it is a move in the right direction.”

In his response to Senator Brown, the Justice Minister said there is currently a Committee of the Houses of Parliament looking at the broad issue of fees, “and we await the report of that committee and the recommendations from that process.”

The Bill was passed in the House of Representatives on Wednesday, June 4.