The Nation's two largest building societies say they have implemented measures to prevent any fallout from the loss of correspondent banking services in the United Kingdom.
In advertisements in the nation's two Sunday papers on Sunday, Jamaica National Building Society and Victoria Mutual Building Society said they were informed by their UK banking partner of its decision to terminate its relationship with financial institutions in Latin America and the Caribbean.
They note that the decision is consistent with moves by similar banks to discontinue correspondent banking services for institutions in the region.
The two institutions say the change will affect their members living in Britain and Jamaica who receive their pensions and other payments via banks in the UK.
JNBS and VMBS say they are now in the process of finalising arrangements to allow their UK members to continue to fund their accounts in Jamaica.
Paulette Simpson, Executive in charge of Corporate Affairs and Public Policy in the UK for Jamaica National, said the entity is seeking ways to mitigate the impact on persons residing in the UK or Jamaica who utilize JNBS services.
"We facilitate thousands of members sending money to their accounts in Jamaica for various reasons - savings, for paying their mortgages, or for thier relatives and friends. Money is also received in regards to pensions; their are thousands of pensioners in Jamaica who receive pension from the government of the United Kingdom or from companies with which they used too work and we facilitate the smooth transition of their pension. So that UK partner would no longer provide that service; but we are just about finalizing an arrangement that will allow us to continue to provide all theses services to our members in Jamaica," she asserted.
She said the Building Society has been operating a representative office in the UK for over 30 years.
The loss of correspondent banking relationships is a growing problem for financial institutions in the region and it was on the agenda of the CARICOM Heads of Government Summit held in Guyana earlier this month.
IMF
Meanwhile, the head of the International Monetary Fund concurred, on Monday, that the loss of correspondent banking relationships in developing countries is causing 'systemic' disruptions to their financial systems.
IMF Managing Director Christine Lagarde made the statement in prepared remarks at the New York Federal Reserve. She said that regulators in both major financial centre countries and small countries need to do more to help banks maintain these relationships.
The IMF Head expressed concern that all is not well in the world of small countries with small financial systems. In fact, she said there is a risk that they may become more marginalized.
Ms Lagarde said a number of Caribbean countries have already been affected. As of May, at least 16 banks in five countries have lost all or some of their correspondent banking relationships.
Ms Lagarde said such countries are especially vulnerable, often depend on remittances from workers abroad, and have minimal access to financial services under the best of circumstances.
She also said the affected countries need to upgrade their regulatory and supervisory frameworks to enhance compliance with international standards, especially in the area of anti-money laundering and anti-terrorism finance compliance.
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