Members of the Jamaica National Building Society (JNBS) will in three weeks cast their votes on a proposal by the JNBS board of directors to convert the building society to a commercial bank and to restructure the JN Group.

In a special general meeting on November 14, members of the Building Society are being urged to vote “yes” to the reorganisation of the JN Group, which if not performed, is deemed to compromise the long-term viability of the financial institution.

“The building society structure affords us limited room to raise the funds we need to compete effectively and grow in the future. Moreover, as the present structure of the JN Group is not consistent with the Banking Services Act, it means that were the Society to continue under its current structure, it would be violating the law,” chairman of JNBS, Oliver Clarke, stated in an adjoining message in a notice to the public entitled ‘JN Moving Forward Together’.

The general meeting follows the approval of a commercial bank licence by the Bank of Jamaica, paving the way for JNBS to become the “third -largest” commercial bank in the island. Last month JNBS said it received an Order from the Supreme Court to summon a meeting of its members to vote on the proposed changes.

Minister of Finance Audley Shaw said last month that the two new commercial licences for JNBS and Jamaica Money Market Brokers were in keeping with the new Government’s policy of competitiveness in the financial sector.

“I say to the commercial banks: ‘look out’, because I am pushing for competition,” Shaw said, adding, the new banks would mean “more competition and lower rates”.

While the the JNBS public notice does not make reference to the likely cost of loans, it does state that “JN is committed to maintaining fees which are lower than those charged by other commercial banks and will seek to maintain this philosophy going forward. That is how the JN Group will pass meaningful benefits onto you its members”.

Subsequent to approval by members, JNBS will return to the Supreme Court for a final decision, and if approved it will be signed by the minister of finance for the bank to commence operations as a commercial bank.

Locally, the meetings are scheduled for Savanna-la-Mar, Westmoreland; Montego Bay, St James; Mandeville, Manchester; and Kingston; while overseas meetings will be held with JN members in London and Birmingham in the United Kingdom; Toronto, Canada; and Florida and New York in the United States of America.

General manager of the financial institution, Earl Jarrett, said a series of meetings will be held with members locally and overseas to clarify or provide additional information about the process.

“These final meetings will ultimately position JN to respond to members’ demands for access to banking services with a more positive customer experience,” Jarrett stated in a release from the financial institution. “We anticipate that these changes will result in positive benefits to our members, as this will be a progressive move for JN and Jamaicans, locally and overseas,” he continued.

The building society stated that unlike other mutual organisations, under the proposed change JNBS will remain a mutual organisation owned by its members. It added that members’ mutual rights will be preserved in a new mutual holding company, which will own all the entities in the JN Group.

“Unlike other mutual organisations, including those in the United Kingdom, your membership rights in the society will be retained in the new JN Group. In other words, you will continue to be a member of the mutual holding company which will own the JN Group.”

Upon completion of the new Jamaica National, the building society says it will be fully compliant with Jamaican banking laws and says that it will provide access to a wide range of commercial banking products without high fees, while preserving mutuality and providing access to more benefits.

“In the final analysis, JN at 142 years old will become a more flexible and modern, fully Jamaican-owned financial institution. These changes will position its operations to achieve growth for Jamaicans here and in the Diaspora,” Jarrett reasoned.

“I am heartened by the prospects for the new and emerging JN Group and the positive direction in which it will take all of us. Therefore, let us hold hands as we consolidate our movement and build a stronger JN family, to grow Jamaica National and grow Jamaica,” he said.

As at March, JNBS held assets of $134.6 billion and holds representative offices in the United Kingdom, the United States of America and Canada.

The society is the parent of subsidiary companies JN Small Business Loans Limited, JN General Insurance Company Ltd, JN Fund Managers Ltd, JN Life Insurance Company Limited, JN Money Services Ltd, and Management Control Systems Ltd, and the Jamaica Automobile Association (JAA)(Services) Ltd.

The institution notes that following the transformation process, Manufacturers’ Credit and Information Services Ltd and JAA will merge into one company under the name JAA (Service) Ltd. The entity will undertake the marketing of the Advance card and fleet management services, along with any customer engagement.

JN added that these services will accompany JAA’s current services, which include emergency and roadside assistance, driving school, chauffeur services, and vehicle document renewal, among others.