Cambios facing total shutdown

Cambios facing total shutdown

BY KIMONE FRANCIS Observer online reporter

Saturday, August 08, 2015

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KINGSTON, Jamaica — There were jitters among cambio operators yesterday after they were informed that their businesses islandwide could be shut down this month.
Manchester businessman and executive member of the Jamaica Cambio Association Valenton Wint told the Jamaica Observer yesterday that local cambio services were in “uncertain waters” at this time following the threat of closure.
Bank of Jamaica officials could not be reached yesterday to comment on the development.
Wint told the Observer that commercial banks have “seemingly all joined forces in cessation of relationships” with cambios. He said a letter, advising of the shutdown, has been sent to cambios across the island and that National Commercial Bank yesterday issued a letter advising that the bank would no longer be accepting any foreign instrument from cambios.
“The banks claim that the ongoing impasse is as a result of pressure that they are coming under by their bankers overseas,” Wint said, adding that cambios are facing great difficulties at this time.
A copy of that letter obtained by the Observer read in part: “National Commercial Bank Jamaica Limited and its subsidiaries wish to advise that effective, Friday, August 21, 2015 we will no longer be able to facilitate transaction involving the receipt by US foreign currency banknotes for the benefit of Money Service Business (MSB)”.
MSBs are entities such as cambios or exchange bureaus under the laws of the Bank of Jamaica or any entity operating as a money transfer or money remittance agency.
The bank said the position was taken against the background of recent modification made to the terms and conditions in its agreement with its banknote service provider.
It added that multiple business lines owned by a person (individual or entity) which fall within the meaning of MSB are also subjected to the restrictions.
“We are quite saddened because cambios are licensed entities that are regulated by the Bank of Jamaica and are legal entities,” added Wint.
He said it was quite strange that commercial banks were able to impose restrictions and cause cambios to close their doors and nothing put in place by either the Bank of Jamaica or the Government to ensure that the foreign exchange market remains viable.
“… Cambios were institutionalised by the Government of Jamaica and are audited quite frequently. We see it as a threat, not only to cambios, but also to remittances because the letters that they sent did in fact suggest that they will not be taking any foreign instrument from cambios or remittances,” said Wint.
“Where there is no competition, people will buy at any rate and sell at any rate and there will be no control measures in place,” Wint said.
At the same time, he told the Observer that there are moves afoot to have dialogue with Bank of Jamaica Governor Brian Wynter. He said audience was also being sought with Finance Minister Dr Peter Phillips.
In the meantime, an emergency meeting of the cambio association has also been called for August 22.

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