Tue | Mar 20, 2018

Letter of the Day | The audacity of banks

Published:Friday | February 3, 2017 | 12:00 AMA. Lerroy Brown


Knowing what we all know now about the clandestine behaviour of our banks, if Transparency International (TI) were to redo its rating of Jamaica, I'm certain that the index would fall further.

Let us recall the social history of banking in Jamaica. We can recall those days when banks were not trusted; when people would hide ALL their monies under their proverbial mattresses, which, in some cases, were real mattresses. It took government agencies such as API, the equivalent of JIS, along with the banks themselves, many hours of advertising over several years to convince many of our natives that banks were safe and that banking was a sensible thing to do.

One of the advantages posited then was that we were 'lending' our monies to banks, which they had the glorious opportunity to lend to borrowers at a certain rate of returns. Our further understanding is that we would receive a portion of the returns (called our interest) that the bank received from the borrower.

Now, my further simplistic understanding is that the overheads of the banks have eroded the amount of interest that they are collecting from borrowers to the extent that they now have to turn their attention to our deposits in order to keep afloat. It now means that the tables have been turned and instead of us lending the banks our hard-earned monies, we're, by their behaviour, PAYING them to keep not just our monies, but also to keep our names on their books. This is preposterous!

Now, at least two things must be borne in mind:

1. Although banking has got much more automated and should have smaller overheads, expenses are high largely because of their lavish lifestyles that they want to continue to furnish at the expense of the little farmer, for instance, who has to struggle with his produce over hills and valleys every week to renegotiate prices with the consumer. If he makes a little profit, he puts a little something away at the bank for a rainy day. But the banks have colluded and fast-forwarded a rainy day on him.

I would not exercise the audacity of telling banks what overheads, such as expensive salaries and exorbitant allowances, to cut, but I would like to remind the commercial banks in particular that we have other options called building societies and credit unions. And whenever those choose to fail us, we still have Plan C: our mattresses.

So those bankers who want to force us to use their institutions by phasing out cash transactions and by telling us that we cannot perform transactions of certain sizes, 'Faget it'.

A'Lerroy Brown