Concerns limit on cash transactions will profit banks
Daraine Luton, Senior Staff Reporter
Legislators in both houses of parliament have raised concerns that the amended Proceeds of Crime Act will provide banks with further avenues to make windfall profits on the backs of ordinary Jamaicans.
Following statements in the House of Representatives last Tuesday that the amended bill, which places a limit on cash transactions at J$1 million, would be further guaranteeing profits for bank, some senators last Friday argued that the move will further strengthen the banks.
Government senator Lambert Brown said the interest spread of the banks has been too wide and the parliament should not assist on them to continue making super normal profits.
"I believe the banks, for example, have set out to treat the Jamaican citizen in a rapacious manner. When a worker chooses to change his or her cheque in the bank, he or she has to pay $140, and you see the movement in the fees," said Brown.
Last Tuesday, Delroy Chuck, the leader of Opposition Business in the House of Representatives, argued that the banks were the major profit earners in Jamaica.
"The two major banks make in excess of J$10 billion (per year). Very few companies in this country make that money, and why they make so much money is that they charge for everything," Chuck said.
Government MP Fitz Jackson said the Parliament should not "guarantee increased revenue from fees for institutions that can do without it at this time".
When the debate about bank charges made its way to the Senate on Friday, Opposition Senator Robert Montague said there were many Jamaicans who would like to open bank accounts but could not do so.
He noted that some banks have even called in customers to close accounts.
"The simple act of opening an account is a major thing. A lot of Jamaicans do not enjoy the facilities of a bank account, it is difficult to open an account. We need to look at these realities," said Montague.
Government Senator Imani Duncan Price noted that 68 per cent of adult Jamaicans had bank accounts. She said the average account in the banking sector hold J$130,000.
"The Government is committed to a competitive financial services sector where the consumer is king. The policies of this government have been about reducing the spreads. You are absolutely right.
"In history, the spreads have been large, but they are coming down, which is a very good thing for this economy, clients, a very good thing for the country," said Duncan Price.
She was interrupted by Opposition Senator Tom Tavares Finson, who in a sotto voco remark, urged Duncan Price to declare her interest.
"She is a banker and has an interest," Tavares Finson remarked.
Duncan-Price has been group marketing manager for the JMMB since April 2009.
When the amended Proceeds of Crime Act is signed into law, it will be illegal for a person to pay or receive cash in excess of J$1 million in a transaction for the purchase of goods or services, or for the reduction of any indebtedness, accounts payable, or other financial obligation.
It will also be unlawful to artificially separate a single activity or course of activity into a set of transactions - so that each transaction involves a payment and receipt of cash of less than J$1 million - if the activity or course of activity involves payment and receipt of cash that exceeds J$1 million.
Persons convicted of either offence face up to 10 years' imprisonment if convicted in the circuit court, and may also be fined. If convicted in a resident magistrate's court, the fine is up to J$3 million and/or three years' imprisonment.
Banks and other financial institutions will be allowed to collect cash above J$1 million. Following passage of the bill in the House, the Senate gave its stamp of approval last Friday.
This followed opposition members voting against the cash transaction limit clause.
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