Fri | Dec 3, 2021

BOJ ready to implement agent banking services

Published:Tuesday | June 20, 2017 | 12:00 AMMcPherse Thompson
The Bank of Jamaica is seen at left, while Scotiabank Jamaica is to the right. The central bank says banks may now apply for permits for businesses to act as agents and provide banking services on their behalf.

Maureen Simms, deputy governor of the Bank of Jamaica (BOJ), said the central bank is now ready to implement agent banking services and deposit-taking institutions can now apply to the central bank for permits.

"The relevant persons in the industry, that is, the deposit-taking institutions wishing to use the services of agents to deliver certain services can now do that," said Simms, while noting that, so far there are no applications.

Agent banking allows regular businesses to offer banking services on behalf of commercial banks, such as deposits and withdrawals; payments of bills and loan repayments; electronic transfer of funds; account balance enquiries; and collection of know-your-customer and customer due diligence documentation.

Executive director of the Jamaica Bankers Association, Richard Murray, said they have provided feedback to the BOJ on agent services and were still awaiting a meeting to discuss the points made.

However, Simms said the services approved to be provided are stipulated in section 108 of the Banking Services Act and any change to that would mean amending the law.

"BOJ does not have any discretion in relation to that," she said.

Agents are not allowed to levy a fee or charge for the banking services they provide; nor to undertake banking services in their own name. They are also prohibited from opening bank accounts, granting loans on behalf of deposit-taking institutions or subcontracting another body to carry out agent banking services on its behalf.

According to the BOJ, there is no statutory requirement for transaction limits when undertaking business through an agent. However, a deposit-taking institution may impose transaction limits on its agents based on the bank's risk appetite and its assessment of the agent's ability to control risks.

The Banking Services Act does not impose limits on the number of agents that a deposit-taking institution can appoint. However, each agent's appointment is subject to approval by the BOJ.

The law is silent on whether an agent can be appointed by more than one deposit-taking institution, but the BOJ said it does not contemplate an agent acting for more than one bank.