Be more proactive on lending rates- Samuda tells BOJ Governor
CHAIRMAN OF the Economy and Production Committee of Parliament Karl Samuda, on Thursday, urged Bank of Jamaica Governor Brian Wynter to comment publicly on areas of glaring inconsistencies within individual banks, particularly as they relate to commercial as against personal loans.
After a seven-month break, the committee resumed discussions on the vexing banking, fees issue, but Samuda used the opportunity to try and elicit comment from the central bank governor on other banking issues.
Samuda said he had listened to the governor intently and read every word in the central bank governor's quarterly report yet he found that some important issues had been not addressed.
"I long for the day when I'll hear you make commentary on the differences in approach to the handling of credit by the banks in the various categories of loans and the interest rates attendant to each," the chairman said.
According to Samuda, he longed for the day when the governor would address the fact that a car loan could be accessed at less than 10 per cent for seven years but a businessperson could not get a loan for under 13 to 15 per cent to expand his business in the manufacturing sector.
He said it would be easier for the owner to apply for a loan to purchase a Mercedes Benz at 10 per cent for seven years.
"I will be looking out for your next report when I will hear some commentary, whether it be positive or negative or indifferent, but some commentary on that phenomenon."
In a terse response on the issue, Wynter said: "Thank you Chairman, and I take note of your suggestions."
Wynter and senior BOJ executives told members of the parliamentary committee that the Banking Services Act, which was passed by the House and Senate, was slated for implementation by the third quarter of 2015.
However, notwithstanding a code of conduct, which will form part of the regulations of the new legislation, committee members expressed concerns that a number of issues affecting customers of the banks would not be addressed in the new regulatory framework.
"We hope that we will see from your public expressions of analysis a little more proactive attitude towards the problems that confront the consuming public and the charges by the banks," said Samuda to the governor.
Samuda asked the BOJ boss to carry out proprietary work so that the legislators could "commence the process by which meaningful change can take place to the benefit of the consumers who have to use the banks' services".
"It cannot be that there are these charges that offend so many people and we cannot, at least, examine them in sufficient depth to make proposals that would do little injury to the companies, but great benefit to the consumers."