By McPherse Thompson,
Staff Reporter
THE Bank of Nova Scotia (BNS) Jamaica has suggested it could not guarantee satisfying the requirements of people who want to buy foreign exchange at the bank, even where they make reservations beforehand.
Noting that the foreign exchange that the bank bought over-the-counter on a daily basis was a small proportion of what the public usually required, BNS managing director, William "Bill" Clarke, said that "even if you make a reservation it is going to be dependent on what is available to us on a given day."
He was responding to a concern raised by a BNS shareholder during the bank's annual general meeting at Le Meridien Jamaica Pegasus Hotel, New Kingston earlier this week.
The shareholder reported to the meeting that she went to a branch of the bank recently seeking to buy some US dollars. Personnel at the bank advised her she would have to pay J$46.90 for each US$1 instead of J$44.90, the published rate in the bank that day, because she had not made a reservation. They also advised her she could make a reservation and return the following day when she would be able to obtain the foreign exchange at the lower rate. However, when she returned the following day, they told her she still had to pay the J$46.90 if she wanted to buy the currency, even though the published rate remained at J$44.90.
Dwight Richardson, general manager in charge of finance at BNS, and the first official to respond to the shareholder, explained that on business days, the bank allocates a certain amount of foreign exchange to each branch and customers wishing to acquire it would be required to access the rates in line with the way those branches have been instructed. "Generally, that seems to be in line with the way things go," said Mr. Richardson.
However, the shareholder wanted to know if it was ethical for her to be told to make a reservation for the amount she requested, asked to return the following day and then told she still had to pay the higher rate.
Mr. Clarke said ethics was paramount in the business and said that if there was anything inappropriate about the transaction "we have to deal with that."
Other shareholders, dissatisfied with the responses from both Mr. Clarke and Mr. Richardson, urged them to address the concern more appropriately because it was something which apparently affected other people.
BNS chairman Bruce Birmingham told the meeting that while they would like to address the matter, the bank would have to be furnished with the specifics. "We are asking for an opportunity to investigate what happened," he said.
Earlier, Mr. Clarke had suggested that the buying and selling of foreign exchange was a contentious issue which has resulted in the Fair Trading Commission (FTC) issuing certain wording "which we display in our locations."
Last year, the FTC brought the sale of foreign currency by commercial banks under increased scrutiny following complaints that the rates posted were often not the same rates demanded by the staff of those banks.
Then FTC executive director, A.B. Stewart-Stephenson, said such an inconsistency may amount to false and misleading advertising by the banks, and consequently a breach of the Fair Competition Act (FCA).
At the time, Mr. Stewart-Stephenson also said the Commission was appreciative of the peculiarities of the foreign exchange market and was engaged in dialogue with the Jamaica Bankers Association to formulate standardised wording to be placed in all commercial banks to inform customers of the possible changes in the selling rates throughout the day.
He said, "it is not good enough for the customers to be told that the rate on the board is for limited purchases, and if additional quantities are required then a higher price has to be negotiated."
In addition, he said, "if a limited quantity of currency is available each day at the rate quoted on the board, this must be clearly indicated to the public, together with the fact that quantities above a stated amount will have to be negotiated at a different rate. The critical point being made here is that it is a misleading representation under the FCA to publicly quote foreign exchange rates and then inform customers when they seek to purchase the amount of currency required, that they will have to pay a higher rate of exchange for that amount," said Mr. Stewart-Stephenson.
