THE National People’s Co-operative Bank of Jamaica (NPCB) has come out in defence of its operations, more than two weeks after reports broke of serious operational breaches at the institution.

“The members’ deposits have been used productively, making loans to members, cash investments, as well as being invested in property, plant and equipment,” the NPCB said in an advertisement in the Jamaica Observer yesterday.

An audit of the NPCD was ordered by the agriculture ministry after the regulator, the Agricultural Credit Board (ACB) found gross irregularities at the institution, including $665 million of depositors’ funds which it said were ‘unaccounted for’.

The audit categorised the amounts as “not substantiated”, while Agriculture Minister Derrick Kellier, speaking at a press conference following the leak of the audit, took issue with the use of the term “unaccounted for” in the media. Chairman of the ACB Hugh Graham said about $400 million of the funds had been spent on assets.

The NPCB, in its advertisement yesterday, said that, while it understood the concerns of stakeholders, some media reports have “misrepresented the NPCB’s true position”.

The NPCB said members have “continued to display their confidence in the organisation and continue to utilise our facilities across Jamaica. This kind of loyalty is a clear signal that the NPCB has been making a positive impact in communities”.

A week ago, Milverton Reynolds, head of the Development Bank of Jamaica (DBJ), which provides loans to farmers through the NPCB, said the DBJ said it had no choice but to stop the flow of funds until the ongoing probe is concluded.

“There needs to be clarity. And also, we wanted to be sure that plans were going to be put in place to address the issues raised. We are still awaiting the final outcome of the report and we will be guided accordingly,” Reynolds said. He maintained, however, that the DBJ was satisfied with the measures taken to tidy up the situation.

In the meantime, the NPCB said it is cooperating with the audit team as the probe continues in order to “overcome the current challenges as quickly as possible”. The bank maintained that it is a private institution, notwithstanding its relationship with the DBJ, whose stream of outstanding loan funds as of May 31, 2015 totalled $509 million.

Last week, president of the Jamaica Agricultural Society (JAS), Senator Norman Grant, said he was very concerned about the findings of the audit, and called on the DBJ to review the decision to suspend loans to farmers through the NPCB. He argued that, while the investigations were being carried out and corrective measures put in place, the core functions of the NPCB must be continued.

“The farmers should not suffer because of a lapse in oversight,” Grant stated. At the same time, he said he was satisfied with the response of the agriculture ministry.

The board of the NPCB has been dissolved and its operations taken over by the ACB for now, but no action has been been brought against any director or member of the management team.

— Alphea Saunders