Sat | Jul 21, 2018

Expand services offered under agency banking - Duncan

Published:Wednesday | December 21, 2016 | 12:00 AMMcPherse Thompson
Keith Duncan, Co-chairman of the Economic Programme Oversight Committee

Co-chairman of the Economic Programme Oversight Committee (EPOC), Keith Duncan, has sided with government Senator Don Wehby, who has suggested that the services to be offered by agents licensed to undertake banking services should be expanded.

Duncan, group chief executive officer of the JMMB Group, agreed with Wehby that agents, which will be acting on behalf of deposit-taking institutions, should be allowed to grant loans and accept deposits, activities which are currently prohibited based on proposals by the Bank of Jamaica (BOJ).

Addressing a press conference of EPOC in New Kingston last week, Duncan noted that a structural benchmark under the standby agreement with the International Monetary Fund is that the government establishes a financial inclusion council by March 2017.

The council will be mandated to address access to capital, increased competition in the banking sector, agency banking and the use of mobile money.

"Jamaica is underbanked and what we would like to see is more Jamaicans having an opportunity to access capital and to do business," he said.

Noting that he was in agreement with Wehby, Duncan said the process should be made as friendly as possible "so we can close the business with the agents once they are qualified and licensed by the regulator".

He said he believed that the regulations are always open for review and hence, expanding the activities to be undertaken by agents is something that could be discussed with the BOJ.

"I believe that once you are able to work in a collaborative and engaging way you can say to the central bank, if it increases further risks these are how these risks can be mitigated," said Duncan, alluding to JMMB being granted a commercial banking licence earlier this year.

"Mr Wehby made the suggestion a few days ago and I believe that the Bankers Association will be a proper forum for him to take it to, and the Bankers Association would then engage the BOJ," he said.

He also noted that First Global Bank - a subsidiary of the GraceKennedy Group of which Wehby is chief executive officer - is a member of the Bankers Association and that "they should use that mechanism to engage the Bank of Jamaica".

Wehby, making his contribution to the debate on the Banking Services (Deposit Taking Institutions) (Agent Banking) regulations recently, argued that Jamaica's financial system is robust enough to allow for the agents of banks to offer the additional services.

Senator Wehby hailed the regulations as ensuring that underserved communities in Jamaica have access to financial services.

He also noted that the regulations would support micro, small and medium-sized enterprises, employment creation and productivity.


The BOJ has proposed that services to be offered by agents include delivery of customer account statements and payment instruments such as prepaid cards on behalf of deposit taking institutions, as well as cheque encashment, deposits and withdrawals, electronic transfer of funds, account balance enquiries, and the collection of 'know your customer and customer' due diligence documentation.

However, the deposit-taking institution shall remain responsible for the analysis or verification of the adequacy and acceptability of the documentation.

Notwithstanding, the central bank's Supervisory Committee will have the discretion to include any other activity as it deems fit.

The BOJ further proposed that the regulations explicitly prohibit agents from providing a guarantee on behalf of the deposit-taking institution, offering banking services on its own accord, opening accounts, granting loans or carrying out any appraisal function for the purposes of opening an account or granting of a loan or any other facility except as may be permitted under the Banking Services Act, and providing loans on behalf of the deposit-taking institution.