Olive Nelson | Gov't targets people's money again
'Government to get unclaimed $15 billion next year' stated a leading Gleaner story on September 26, 2018 but what registered in my head was that the Government was getting ready to go after people's money again.
The Gleaner report further stated that the Ministry of Industry, Commerce, Agriculture and Fisheries was targeting the funds in dormant accounts to "create a special fund" to provide loans "at a reasonable interest rate" to MSMEs - micro, small and medium enterprises. This is of course a very laudable objective and the minister, Audley Shaw, should be commended for the energy and zeal he has brought to his newly assigned portfolio.
Before embarking on this project however, the minister, as a representative of the people should ensure that he is not setting up himself to rob Peter to help out Paul. He should painstakingly inform himself of the nature of the dormant account beast which has been created by the banking sector merely as a function of time - the time elapsed since the last transaction.
No bank should be allowed to declare an account dormant while operating multiple other active accounts for the holder or without first making some effort to contact the customer. The point has repeatedly been made that many account holders only become aware of the raid on their 'rainy day' savings when they try to retrieve it with interest a few years after the last transaction only to discover it substantially missing.
It was with shock and dismay that I recently learnt that to reactivate a so-called dormant bank account an entity had to provide financial statements for the previous year, a current tax compliance certificate, signature cards and mandates signed by the signatories to the account. And it mattered not that the bank had been the entity's principal banker for over 30 years, or that the entity had other active accounts with said bank or that it had recently delivered updated cheque signing/transaction approval mandates to said bank. Why? "Bank of Jamaica regulations," insisted the bank officer.
To add insult to injury, one would have to go through the very same process to have
'dormant' funds transferred to an interest bearing fixed deposit account in the same bank. It gets worse. The same requirement is now being made of an entity which tries to transfer surplus funds from an active current account into a fixed deposit account. "One would then be deemed to be opening a new account," advised the bank officer - also Bank of Jamaica (BOJ) regulations of course.
The banks operate essentially as a cartel and skipping from one to another will provide no relief. In any event, trying to open a really new account at any bank in Jamaica is currently nothing short of a nightmare courtesy BOJ.
Minister Audley Shaw further opines, in justification of the planned acquisition, that "... the banks find ways to apply charges upon charges. The account is dormant but the charges are not dormant and so sometimes you lucky with how much money you end up with at the end of the day, after all of these charges are built up over time".
So there we have it - the banks clearly out of control and all the people's representative can do for us is play dead and hope that we will be lucky enough to find some funds in our account when next we visit the bank. My question to the venerable minister then is this, "Why then did you not vote in favour of the Fitz Jackson Banking Services Bill which was tabled in Parliament in February this year to encourage a little restraint on the banks' insatiable appetite for super profits at the expense of their hapless customers?"
But who really cares? Not the Government, not the Opposition. Only Mr. Fitz Jackson and possibly then minister Mike Henry who with Opposition MP Denise Daley were not in parliament on that crucial vote casting day, registering their contribution to the narrow 30-29 defeat of the bill. Mr Jackson, who had always seemed to be a lone voice crying in the wilderness on the issue of the prevailing extortion-like banking practices, was then invited by Audley Shaw, then minister of finance to abandon the legislative measure and work with the government in developing a framework to address the concerns he raised (Gleaner, February 14, 2018).
It would be great to know, eight months after, the progress so far made on that framework.