Questions on the business of banking in Ja
There has been much fire and heated discussion, in recent times, about bank profits, bank lending rates and bank practices, but there has been precious little light and reliable insight shed on the matter.
Banner headlines about a hike in income from service charges seem to have been mingled with snippets from the interim Bank of Jamaica report which has been submitted to the Economy and Production Committee of the local Parliament, thereby stirring up, yet again, a howl of protestations from a government agency — the Consumer Affairs Commission — and former heads of local business and civil society groupings.
However, there has not been much heard from the bankers, themselves, even as the criticisms against them grow louder, more vitriolic, and more accusatory.
Surely, the business of banking, however complex, can be explained, and we need to hear from the bankers whether it be at the parliamentary hearings, or on the radio talk shows, or in the print media. I would like to rush to the head of the line with some questions of my own for the bankers:
1. Why is it that if one deposits money in a bank today, and one comes back tomorrow to borrow their own money, that the rate of interest for the loan would be more than the interest rate that the bank is paying on the person's deposit?
2. Why is it that the banks — some banks, not all — are charging to do transactions at the teller counter after one has had to stand in line for so long, but yet they do not charge for the same transaction if it is done online or via an ATM?
3. There is a high rate of exclusion from basic banking services for much of the population. What are the banks doing to make an impactful dent in this bedeviling situation?
4. Why is it that when one presents a cheque, backed by good money, the customer still has to wait at least three days before they can get good funds? Are the banks earning on the value of the cheque while the customer is not earning on the value of the cheque?
5. Why is it that when a foreign cheque is deposited to a local account, the bank holds the value of cheque for up to twenty days? Why don't the banks give the credit for the funds quicker than they are now doing?
6. According to the representative from the Consumer Affairs Commission (CAC) who spoke on Nationwide's evening programme on January 15, 2014, she said that the banks have been ignoring the call to accept a code of conduct offered by the agency. Why is this, and why has this not been reported to the Bank of Jamaica so that they can take action to have the banks comply?
7. The CAC representative also commented that the banks are sending their profits overseas. Is this true, and why are the banks allowed to do this?
8. Why is it that the banks buy foreign exchange at a rate that is always lower than what they sell the foreign exchange? The customer seems to always have to pay more when buying the foreign currency from the same bank that they sold the currency to.
9. Why is it that when money is stolen from a customer's account or fraud is perpetrated on a credit card, that the bank takes so long to refund the customer? How does the bank manager expect the customer to manage when their money is gone and they have to wait many days for the bank to investigate?
10. Why is it that the banks charge different/varying rates and levels of fees when they all are offering the same services?
These are just my few questions, but the bankers need to start answering. Otherwise, the questions will keep coming and the public will call for the Government to intervene. Not so sure that would be a good thing, but never put it past a Government if it comes under populist pressure.
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Bank of Jamaica