| Q |
What is the Bank Of Jamaica? |
| A |
The Bank of Jamaica is Jamaica's central bank. Its role is outlined in the Bank of Jamaica Act 1960.
The Bank has three main functions. These are:
- formulating and implementing monetary policy to maintain price stability;
- ensuring the maintenance of a sound and efficient financial system; and
- meeting the currency needs of the public.
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| Q |
When was the Bank OfJamaica established? |
| A |
The Bank was established in October 1960 by the Bank of Jamaica Law.
and opened for business on 01 May 1961.Back to top |
| Q |
Can I invest money with the Bank of Jamaica? |
| A |
Yes, but this has to be done through the group of primary dealers. Back to top |
| Q |
Is the Bank of Jamaica a department of government? |
| A |
No, it is a statutory body, that is, it was created by an act of parliament that sets out, in broad terms, the mandate, powers and objective of the institution. The Bank is accountable to parliament through a minister of government. Back to top |
| Q |
Why does the country need a central bank? |
| A |
The Bank of Jamaica was established in 1960 to be the sole issuer of coins and notes and to facilitate the management of the country's financial system. Back to top |
| Q |
What exactly does the Bank of Jamaica do? |
| A |
The Bank of Jamaica is responsible for:- issuing coins and notes, ensuring that the currency is authentic and that there is an adequate supply to meet the demands of the public;
- formulating and implementing monetary policy, that is, the measures taken by the Bank to influence the Jamaican economy by regulating the amount of money in circulation.
- ensuring that the financial system is sound and operates efficiently;
- managing the foreign reserves of the country; and
- carrying out other activities that support the implementation of monetary policy and services to the government, banks and licensed financial institutions and the general public
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| Q |
Who is responsible for monetary policy? |
| A |
Bank of Jamaica is responsible for the day-to-day administration of
monetary policy in consultation with the Minister of Finance.Back to top |
| Q |
How does Monetary Policy work? |
| A |
Look under the section on monetary policy for information related to this
topic. topic.Back to top |
| Q |
What is the difference between monetary policy and fiscal policy? |
| A |
Monetary policy refers to the measures taken by the Bank of Jamaica
to influence the economy by regulating the amount of money in circulation.Fiscal policy refers to the measures taken by the government to influence the economy by increasing or decreasing public spending and taxes. Back to top |
| Q |
Who has responsibility for managing the Bank? |
| A |
The Board of Directors must ensure that the Bank is properly managed. The Bank of Jamaica Act Part II 6(1) says that the Board of Directors shall be responsible for the policy and general administration of the affairs of the Bank. Back to top |
| Q |
Who appoints the members of the Board? |
| A |
The members of the Board are appointed by the Minister of Finance. The Board of Directors includes the Governor, who is the Chairman, the Senior Deputy Governor, the Financial Secretary and six other directors all appointed by the Minister of Finance. Back to top |
| Q |
Who can be appointed to the Board? |
| A |
The Bank of Jamaica Act states that the following categories of persons may not
be appointed to the Board:- a member of either House of Parliament;
- a director, officer or employee of any commercial bank or any specified financial institution;
- a member of the Kingston and St. Andrew Corporation or of any Parish Council.
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| Q |
What is the role of the Board of Directors? |
| A |
The Board of Directors must ensure that the Bank is properly managed. The Bank of Jamaica Act Part II 6(1) says that the Board of Directors shall be responsible for the policy and general administration of the affairs of the Bank. Back to top |
| Q |
Are the directors paid? |
| A |
The Bank of Jamaica Act says , "There shall be paid to the Governor and the other directors such remuneration, if any (whether by way of salaries or traveling or other allowances), as the Minister may determine. Back to top |
| Q |
What is the role of the Governor of the Bank? |
| A |
The Governor of the Bank of Jamaica is the Chief Executive Officer of the Bank and in this capacity has full control and authority over the work and business of the Bank. He is also chairman of the Board of Directors. Back to top |
| Q |
How is the Governor appointed? |
| A |
The Governor is appointed by the Minister of Finance for a period not
Exceeding five years.Back to top |
| Q |
What is the term of office for the Governor |
| A |
The Governor's term of office shall not exceed five years, but he/she is
eligible for reappointment.Back to top |
| Q |
Can the Governor be dismissed from office? |
| A |
The Minister of Finance may terminate the appointment of the Governor if
such person :- becomes of unsound mind or becomes permanently unable to perform his functions by reason of ill health;
- becomes bankrupt, or compounds with, or suspends payment to his creditors;
- is convicted and sentenced to a term of imprisonment or to death;
- is convicted of any offence involving dishonesty;
- fails to carry out any of the functions conferred or imposed on him under the Bank of Jamaica Act.
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| Q |
Who is the Supervisor of Banks? |
| A |
The Governor of the Bank of Jamaica is the Supervisor of Banks. Back to top |
| Q |
If I have a complaint about a commercial bank, can I file a complaint with the Bank of Jamaica regarding that bank? |
| A |
Yes.You may contact the Financial Institutions Supervisory Division (FISD) at the Bank of Jamaica. Back to top |
| Q |
Where can I find a list of deposit-taking institutions in Jamaica? |
| A |
A list of licensed deposit-taking institutions, that is, commercial banks , merchant banks, and building societies may be found on the Bank of Jamaica's website: www.boj.org.jm. Back to top |
| Q |
Does the Bank of Jamaica supervise and regulate deposit-taking institutions in Jamaica? |
| A |
Yes. Bank of Jamaica supervises and regulates deposit-taking institutions in Jamaica, that is, commercial banks, merchant banks and building societies. Back to top |
| Q |
Does the Bank of Jamaica offer deposit insurance? |
| A |
No. This is offered by the Jamaica Deposit Insurance Corporation (JDIC). (web site: www.jdic.org) Back to top |
| Q |
Can the Bank of Jamaica provide information on the market share of a bank? |
| A |
Yes. Bank of Jamaica publishes, on a quarterly basis, the assets and liabilities of commercial banks, licensees under the Financial Institutions Act as well as building societies. These reports are accessible from the Bank of Jamaica’s website at www.boj.org.jm/financial_data.php. Back to top |
| Q |
How can I tell if I have a counterfeit note? |
| A |
If there is any doubt about the authenticity of a note, look for the following security features: wide windowed thread; novel numbering (vertical and horizontal); intaglio printing on special paper; watermark (Doctor Bird with flower highlight); $500 - iridescent clubs on front left; $1 000 - large butterfly printed in gold ink). Back to top |
| Q |
What should I do if I have a counterfeit note? |
| A |
If you realise that you have a counterfeit note, you should keep the note, record details of the note and contact the nearest police station. If possible, you should provide the police with information about the person from whom you received the note. Back to top |
| Q |
Why wont the Bank of Jamaica reimburse a counterfeit note? |
| A |
The Bank of Jamaica, like all other central banks will not reimburse counterfeit notes, as this could encourage the counterfeiting of notes for the purpose of receiving reimbursement. The Bank would find it difficult to differentiate between someone who is trying to defraud the Bank and an innocent recipient. The Bank of Jamaica has no legal obligation to honour counterfeit notes. The Bank's legal obligation extends only to notes issued by the Bank of Jamaica. Back to top |
| Q |
Who makes our coins? |
| A |
The British Royal Mint is responsible for minting Jamaica's circulating
coins.Back to top |
| Q |
Who prints our bank notes? |
| A |
De La Rue Currency Ltd. in England has printed bank notes used in Jamaica since 1920. Back to top |
| Q |
Who decides which persons are featured on our banknotes? |
| A |
The Bank of Jamaica is responsible for the design of bank notes. However, final approval must be granted by the Minister of Finance. See the Currency Structure Policy which speaks to the categories of persons who can appear on our notes. Back to top |
| Q |
When did Jamaica change to a decimal system of currency? |
| A |
On 08 September 1969. Back to top |
| Q |
Will the BOJ accept old coins and bank notes? |
| A |
All currency issued by the Bank of Jamaica will be accepted for payment at face value. Some coins and notes which have been withdrawn or demonetised will not be accepted by business persons as they are no longer legal tender, but the BOJ will accept them. Back to top |
| Q |
Can I pay for goods and services with coins only? For example, can I pay my utility bill with just coins? |
| A |
The Bank of Jamaica Act Part IV Section 15 (1) sets out limits on a tender of payment in coin:- in the case of coins of a denomination of not less than one dollar, for the payment of an amount not exceeding twenty dollars;
- in the case of coins of a denomination of less than one dollar but not less than five cents, for the payment of an amount not exceeding five dollars;
- in the case of coins of a denomination of less than five cents, for he payment of an amount not exceeding twenty cents.
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| Q |
If a coin is bent, can I still use it? |
| A |
If a coin is bent, mutilated or defaced or weighs less than it should, it
must not be accepted as legal tender.Back to top |
| Q |
If I have a mutilated bank note, will the Bank of Jamaica exchange it for a good note? |
| A |
According to the Bank of Jamaica Act, a person shall not be entitled to
recover from the Bank the value of any lost, stolen, mutilated or imperfect
note or coin. The circumstances in which, and the conditions and
limitations subject to which the value of lost, stolen, mutilated or imperfect
notes or coins may be refunded shall be within the absolute discretion of
the Bank.Back to top |
| Q |
Does the Bank of Jamaica supervise and regulate insurance companies, securities dealers, unit trusts, pension funds and mutual funds? |
| A |
No. These non-deposit taking financial institutions are supervised and regulated by the Financial Services Commission (FSC) (website: www.fscjamaica.org).
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| Q |
If I wanted to establish a commercial bank in Jamaica, how would I proceed? |
| A |
The Banking Act sets out the minimum requirements for establishing a commercial bank. Similarly, The Financial Institutions Act & The Bank of Jamaica Building Societies (Licenses) Regulations 1995 set out the minimum requirements for establishing a merchant bank and building society, respectively.
Copies of the respective legislation can be downloaded from the Financial System section of the Bank of Jamaica’s website: www.boj.org.jm. For further information please contact the Financial Institutions Supervisory Division of the Bank of Jamaica.
Copies of all legislation/regulations may be obtained, for a fee, from the Jamaica Printing Services (1992) Ltd., 77˝ Duke Street, Kingston
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| Q |
If I hold a deposit account with a FINSAC intervened Bank that is no longer in operation, how do I get back my money from that bank? |
| A |
Bank of Jamaica can provide details as to the institution to which such deposits have been transferred. Back to top |
| Q |
If I wish to establish a non-deposit taking company for purposes of lending to the public, would such a company be subject to Bank of Jamaica regulation? |
| A |
No, provided the lending activities contemplated will not be in foreign currency. Only persons expressly authorized by the Minister of Finance and Planning to undertake lending in foreign currency may undertake this activity.
Given the financial nature of money lending, this activity may be subject to regulatory oversight by the Ministry of Finance. Persons intending to undertake this activity should also be guided by the requirements of the Money Lending Act.Back to top |
| Q |
Does the Bank of Jamaica regulate and supervise investment clubs, pyramids, and other such financial schemes? |
| A |
These are not licensed deposit-taking financial institutions. Such activities, if when undertaken, comprise banking type products and banking services, will amount to breaches of the Banking Act, the Financial Institutions Act, the Building Societies Act or (if foreign currency is involved) the Bank of Jamaica Act.
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| Q |
Are interest rates/fees charged by commercial banks and other licensed deposit-taking institutions regulated by the Bank of Jamaica? |
| A |
No. Interest rates and fees are currently determined by the market Bank of Jamaica does however have the power under the Bank of Jamaica Act to prescribe the maximum or minimum interest rates that may be charged or paid by commercial banks and other licensed deposit-taking institutions.
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| Q |
How do you calculate capital adequacy ratios for commercial banks/merchant banks/building societies? |
| A |
Capital adequacy determination in relation to deposit-taking institutions is based on:
i)the stipulated minimum capital requirements in law as follows:
- commercial banks - section 6 of the Banking Act
- merchant banks - section 6 of the Financial Institutions Act; and
- building societies - paragraph 7 of the Bank of Jamaica (Building Societies) Regulations (amended 2004); and
ii)specific capital adequacy ratios, computation details of which are set out in the Banking (Capital Adequacy) Regulations and the Financial Institutions (Capital Adequacy) Regulations.
Copies of all legislation/regulations may be obtained for a fee from the Jamaica Printing Services (1992) Ltd., 77.5; Duke Street, Kingston.Back to top |
| Q |
Are customers of a commercial bank required to disclose the reason/purpose for withdrawals from their accounts? |
| A |
No. The present banking statutes, as well as existing Bank of Jamaica guidelines, do not require customers of a commercial bank or any other deposit-taking institution, to disclose the reason for withdrawals from their accounts.
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| Q |
Are customers of a commercial bank required to disclose the source of funds to be deposited to their accounts? |
| A |
Yes. Under the Bank of Jamaica's AML/CFT Guidance Notes and pursuant to the Money Laundering Act (MLA) that mandates the implementation of regulatory controls to prevent money laundering, banks are required to request from the customer specific information relating to the source of those funds.
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| Q |
Where can I obtain a copy of the audited financial statements of a commercial bank, merchant bank or building society? |
| A |
Persons should contact either individual institutions or the Office of the Registrar of Companies, 1 Grenada Way, Kingston 5, to obtain copies of audited financial statements of these institutions.
Banks are also required by law to display, throughout each year, a copy of their latest audited balance sheet and profit and loss account in each place of business in Jamaica. In addition, they are required to publish these figures in at least one daily newspaper.Back to top |
| Q |
What is the difference between a commercial bank and a merchant bank? |
| A |
The main differences between a commercial bank and a merchant bank are:
i)commercial banks are able to offer chequing/current accounts while merchant banks cannot offer accounts that are repayable on demand or under 14 days notice by cheque; and
ii) the statutory minimum start-up capital for commercial banks is greater than that required for merchant banks.
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| Q |
Does BOJ supervise Credit Unions? |
| A |
The Minister of Finance has designated credit unions 'specified financial institutions' under the Bank of Jamaica Act, which currently enables the Bank to obtain information on their operations. Regulations to establish a formal supervisory framework for these entities have been drafted and subject to extensive discussion with the industry. Bank of Jamaica will assume full supervisory responsibility for credit unions when these Regulations have been finalized.
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| Q |
What happens to unclaimed deposits or other balances held at commercial banks/merchant banks/building societies? |
| A |
Where balances in deposit accounts held at commercial banks, merchant banks or building societies reflect no activity for a period of fifteen or more years, these funds by law become part of the revenues of the Government of Jamaica (GOJ).
Prior to the transfer to Government revenues, the Minister of Finance publishes a notice in the Jamaica Gazette and at least one daily newspaper detailing the relevant accounts and indicating that if no claim is made for the funds within a year, they shall become part of the revenues of the GOJ.
If within 15 years of becoming part of the Government’s revenues, an owner of such unclaimed funds is able to satisfactorily establish a claim to the funds to the Accountant General, such balances are repayable to the owner.Back to top |
| Q |
Does a customer have to repay his/her loan if it becomes non-performing (past due for 3 months or more) since the bank is required by law to cease taking interest to its Profit and Loss Account? |
| A |
Yes. A customer's contractual obligation to repay a loan (principal and interest) under their loan agreement with a bank is not affected by legal/central bank requirements pertaining to the bank's accounting treatment of any uncollected principal and interest that is due.
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| Q |
Who owns the bank of jamaica? does it have shareholders? |
| A |
The Bank of Jamaica does not have shareholders. It is wholly owned by the Government of Jamaica. The Bank's authorized share capital of J$4 million has been subscribed and fully paid up by the Government. Back to top |
