The Bank of Jamaica’s supervisory authority and responsibility for deposit-taking financial institutions is established by virtue of a number of Primary and Secondary Legislative Acts of Parliament.  These statutes provide the legal and policy parameters for the licensing and supervision of financial institutions.  These include the legal basis for enacting Secondary legislation, prescribing prudential criteria and minimum solvency standards to be maintained by licensees, as well as the various powers available to the BOJ and the Minister of Finance in the event that bank distress or failure appear imminent or threatens the soundness of the financial system.  Subsidiary legislation or Regulations specify the precise requirements and procedures in dealing with certain areas of supervisory standards and institutional practice impacting commercial banks, merchant banks and building societies.

Principal Legislation
The Bank of Jamaica Act, 1960 (amended 1992, 1994, 1995, 2001, 2002, 2004, 2005)
The Banking Act, 1992 (amended 1997, 2002, 2004)
The Financial Institutions Act, 1992 (amended 1997, 2002,2004)
The Building Societies Act, 1897 (amended 1995, 2002, 2004)

Subsidiary Legislation
The Bank of Jamaica (Building Societies) Regulations, 1995 (amended 2005)
The Building Societies (Licences) Regulations, 1995
The Banking (Establishment of Branches) Regulations, 1996
The Banking (Amalgamation and Transfers) Regulations, 1996
The Banking (Licence Fees) Regulations, 2003
The Financial Institutions (Establishment of Branches) Regulations, 1996
The Financial Institutions (Amalgamation and Transfers) Regulations, 1996
The Financial Institutions (Licence Fees) Regulations, 2003
The Banking (Capital Adequacy) Regulations, 2004
The Financial Institutions (Capital Adequacy) Regulations, 2004

Ministry of Justice

Licensees also have statutory responsibilities under other pieces of legislation the administration of which reside principally with other competent authorities (e.g. The Jamaica Deposit Insurance Corporation; The Financial Intelligence Division; the Department of Public Prosecution):

Other Legislation
The Companies Act, 2004
Deposit Insurance Act, 1998
The Terrorism Prevention Act, 2005
The Income Tax Act
The Proceeds of Crime Act, 2007
Financial Investigations Division Act, 2010
Terrorism Prevention (Reporting Entities) Regulationst, 2010

Copies available at the Ministry of Justice

Proceeds of Crimes Act (POCA)-  This Act was passed by Parliament in March 2007 and came into effect on May 30, 2007.   POCA is a wide-ranging legislation that targets benefits derived from the commission of any crime, and incorporates the concept of money laundering as well as introduces the principle of civil procedure.

With the passage of POCA the Drug Offences (Forfeiture of Proceeds) Act, Dangerous Drugs Act, Money Laundering Act, 1996, and the Money Laundering Regulations, 1997 have been effectively repealed and replaced.


The Financial Investigations Division Act  - The Financial Investigations Division Act was passed in March 2010.  The Act gives the existing Financial Investigations Division (FID) of the Ministry of Finance and the Public Service the necessary statutory powers and protections to carry out that Division’s mandate of investigating and prosecuting financial crime, including money laundering and the financing of terrorism.  The FID operates as Jamaica’s Financial Intelligence Unit (FIU) and the passage of the statute will assist the FID in attaining membership with the Egmont Group of FIUs1 .

Terrorism Prevention (Reporting Entities) Regulations - These Regulations were promulgated under the Terrorism Prevention Act in March 2010. These Regulations outline the operational controls that must be maintained by financial institutions particularly when contemplating the commencement of a business relationship or one-off transaction, and largely mirror Know Your Customer (KYC) obligations contained in Regulations under the Proceeds of Crime Act.  



On-going review of the legislative framework is a necessary and fundamental step in achieving supervisory policy and developmental objectives, especially given the dynamism in local and international markets and the evolving nature of international best practice standards in banking supervision.   In this regard, the Bank of Jamaica is involved in a number of initiatives for amendment of legislation and development of related regulations as follows: 
Credit Regulations
The Credit Regulations have been comprehensively re-drafted to take account of, inter alia, the latest Basel Committee standards on credit risk and loan valuation, as well as impairment requirements prescribed under the International Financial Reporting Standards (IFRS) to achieve greater convergence in regulatory and accounting provisioning methodologies. 

The Banking (Qualifications of Auditors) Regulations - Regulations that specify expectations for auditors in undertaking an external audit of a supervised financial institution, have been drafted and are with the Minister of Finance for approval.  Among other things, the criteria specified in these regulations relate to the independence, experience and academic qualification of the external auditors.  These proposed regulations would also require prior notification to the Bank of Jamaica of proposed appointments.  The Bank of Jamaica would be empowered to object to the appointment of an external auditor if, in the view of the Bank of Jamaica, there is evidence that such auditor is not in compliance with the provisions of the regulations.

Bank of Jamaica (Credit Unions) Regulations - Regulations to establish the supervisory regime that will be applicable to credit unions have been drafted.  These regulations will, among other things, prescribe prudential criteria covering, inter alia, capital adequacy, liquid assets, credit limits, non-accrual and provisioning requirements, submission of financial statements, solvency standards and remedial action that can be taken by supervisory authorities with respect to statutory violations, unsafe and unsound practices or insolvency.   The draft Regulations have benefited from extensive dialogue with the credit union sector and are pending presentation to Parliament by the Minister of Finance.

Omnibus Bill - The Bank is in the process of reviewing legislation governing the operations of deposit-taking entities (i.e. the Banking Act, Financial Institutions Act and the Building Societies Act) with a view to consolidating these pieces of legislation into one consolidated statute. In so doing it is intended that any existing inconsistencies between these statutes will be removed and this will ensure a more synchronized progression of updates to the laws governing the deposit-taking taking industry. This initiative is also intended to implement enhancements regarding consolidated and conglomerate supervision that will bring the regulation of the banking sector in line with the recently issued Revised Basel Core Principles on Banking Supervision. Revisions to the financial legislation will also focus on current issues such as outsourcing, as well as the proposed role of credit bureaux, provisions for electronic reporting and enhancing powers as regards the investigation and prosecution of illegal deposit taking activities.  Cabinet approved the recommendations proposing the implementation of this Omnibus legislation in August 2010, and drafting is in progress by the Chief Parliamentary Counsel.
Building Societies (Licences Fees) Regulations - The Building Societies (Licenses) Regulations are being amended to harmonise the licensing fees payable by building societies on the grant of a license and annually, with the rates applicable to commercial banks and FIA licensees.

1The Egmont Group is an informal group of financial intelligence units (FIUs) established in 1995 with the objective of providing a forum for FIUs to improve support to their respective national anti-money laundering programmes inclusive of expanding and systemizing the exchange of financial intelligence information, improving expertise and capabilities of FIU personnel and fostering better communication among FIUs through application of technology.

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