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Bank of Jamaica’s New Expansion Policy

Alaina Hull

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Bank of Jamaica Governor Brian Wynter

Credit expansion is one of the main agendas of the Bank of Jamaica. The private sector businesses seem to have seen a rise in terms of credit expansion.  It has grown by a rate of 15.2% over the course of one year.  The bank is worried about the rate at which expansion is taking place. Despite the fact that the economy is growing, the rate at which it is growing does not seem satisfying. The Governor of Bank of Jamaica, Brian Wynter, said in a recent interview that the bank has decided to take some new measures to improve the rate of growth.

Policy Rate Takes a Cut

The bank has reduced the policy rate to a mere 0.75%. This cut signifies a reduction by 50 basis points from its previous value. It is expected that this reduction will bring in more expansion in the business sector which in turn will lead to more growth and economic activity. The bank has decreased the interest rate corridor so as to complement the policy rate reduction. It was reduced to 200 basis points.  The standard interest rate will be  2.75 percent per annum. This will reduce the gap between the interests obtained by the public for their deposits and the interest paid by them for the loans.

More Liquidity in the System

Another move observed by the bank is the reduction of the cash reserve requirement by almost 2 percent. The current CRR requirement is just 7%. This will improve liquidity in the market. It is likely that an additional $12.3 billion cash flow will be observed in the economy due to this change. Businesses and marketplaces will be able to get more loans and credits for various expansion works. This will be one of the main focuses of the bank. The bank is trying to ensure that they receive better terms and lower interest rates.

These policy changes are expected to increase economic activity in the country and increase the inflation rate to about 5%. Currently, the rate of inflation has been consistently below the expected target. All these changes are expected to bring in better growth in the inflation factor within a period of 3 years.  Domestic agricultural prices are also likely to stabilize in the coming months. Electricity rates have seen a drastic decline in the recent past, though the food industry seems to be moving forward.

The commitment to deliver knowledge and information to the world is a duty that one should not take lightly; it is one that I do not take lightly. Equipped with 10 years of professional writing experience, and even more so of "scribbling in a journal", I aim to provide in-depth, accurate and expeditious news and information. "Journalism can never be silent: that is its greatest virtue and its greatest fault. It must speak, and speak immediately, while the echoes of wonder, the claims of triumph and the signs of horror are still in the air."- Henry Anatole Grunwald [email protected]

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Finance

Chukka Caribbean Adventures Get $5 Million Fresh Equity Infusion from Portland

Alaina Hull

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Chukka Caribbean Adventures, the Jamaican business group promoted by the Melvilles, had invited the investment company, Portland Private Equity, a couple of years ago to make investments in some of its group firms. It started with an investment of $8 million in the holding company, Diverze Assets Inc. in 2017 followed by another tranche in June last year. The investment now is in Chukka Caribbean Adventures Limited and the $5 million comes from Portland Caribbean Fund II. The company says these funds will be deployed in expanding their business.

Businesses Linked to Tourism in the Island

Chukka Caribbean Adventures, as the name suggests, is a company that is engaged in the tourism sector in Jamaica and other territories. Tours offered by the company include beach adventures, zip lines, climbing waterfalls, catamaran cruises, snorkelling, horseback rides, and caves and historic tours. They continue to add more options and one of their newly added offerings is a zip line canopy tour of rainforests in Montpelier, St. James. One can also choose from jeep safaris, nature walks and exploration of a 150-year-old dam, etc. There are over 700 people employed by the company most of them based within the island.

Broadening the Capital Base to Expand further

In the financial and investment world, the investment companies raise capital to fund ventures which in turn use these funds to make further acquisitions. In this current case, for example, Portland Caribbean Fund II had raised $200 million from the market. It has invested these funds in the Melville Group over a period of time. The Melville Group, in turn, can make acquisitions in its own line of business by deploying these funds accordingly. This enables them to diversify and expand their target markets and product offerings. The cruise ship operations and the hotel partners that the company works with, will constantly need fund infusion for both upgrades as well as for regular working capital. Staying funded helps with meeting these needs swiftly.

The investors will subsequently divest the shares they have bought, generally by listing in the stock exchange. They earn a huge profit through such investment-divestment processes.

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Finance

NCB’s Technical Issues on Salary Accounts Resolved

Alaina Hull

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NCB’s Technical Issues

Customers of National Commercial Bank Jamaica Ltd (NCB) have been promised by the bank that the issues they may be facing with their salary accounts will stand completely resolved by Monday, May 27. The bank claims they have already sorted out 95% of the accounts and the remaining are being worked on through Sunday by their technical team.

Problems Mostly ‘Technical’ in Nature

The Managing Director of the NCB Group, Patrick Hylton,  has issued a statement. According to him, the bank was confronted with issues ranging from duplicate submissions, to errors in the submitted documents and even some of the documents being incomplete when received. These needed to be resolved before the respective customers’ accounts were credited with the amounts due as salaries. He claimed they have received certain files on May 25 and the bank’s technical team will work through the weekend to ensure that these are also cleared and the issue fully resolved.

Delays in Mandatory Payments

Many customers of NCB have been worried that the delay in the crediting of the salaries in their accounts would mean their defaulting on certain statutory dues like utility bills etc. Some may have loan repayments and credit card repayments too which are time-bound and attract penalties for delayed remittances. The bank has now assured them that due to the delays on the bank’s  end in crediting the salaries, no penalty would be levied or penalty interest collected from the customers this month. This must come as a relief to the banking customers.

Other Related Problems Are Also Being Attended to

NCB has mentioned that the issues are being faced by customers using the bank’s online banking facilities and those using the mobile app. The bank says the technical issues related to these channels are also being addressed by a separate team and it is hoped that the customers can access all the available services online and through mobile soon.

The bank has given two dedicated email IDs for customers to write to if they are impacted in any way. One relates to the delay penalty for utility and loan/credit card repayments due to delayed remittance of salaries; if any customer has received any charges, they can write to [email protected].

The other contact address given is [email protected]. This mail ID is to be used to register complaints on any issues being faced in regard to the online and mobile app services. Customers will have to attach the relevant screenshots to establish the specific issue faced.

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Finance

Bank of Jamaica’s New Expansion Policy

Alaina Hull

Published

on

Bank of Jamaica Governor Brian Wynter

Credit expansion is one of the main agendas of the Bank of Jamaica. The private sector businesses seem to have seen a rise in terms of credit expansion.  It has grown by a rate of 15.2% over the course of one year.  The bank is worried about the rate at which expansion is taking place. Despite the fact that the economy is growing, the rate at which it is growing does not seem satisfying. The Governor of Bank of Jamaica, Brian Wynter, said in a recent interview that the bank has decided to take some new measures to improve the rate of growth.

Policy Rate Takes a Cut

The bank has reduced the policy rate to a mere 0.75%. This cut signifies a reduction by 50 basis points from its previous value. It is expected that this reduction will bring in more expansion in the business sector which in turn will lead to more growth and economic activity. The bank has decreased the interest rate corridor so as to complement the policy rate reduction. It was reduced to 200 basis points.  The standard interest rate will be  2.75 percent per annum. This will reduce the gap between the interests obtained by the public for their deposits and the interest paid by them for the loans.

More Liquidity in the System

Another move observed by the bank is the reduction of the cash reserve requirement by almost 2 percent. The current CRR requirement is just 7%. This will improve liquidity in the market. It is likely that an additional $12.3 billion cash flow will be observed in the economy due to this change. Businesses and marketplaces will be able to get more loans and credits for various expansion works. This will be one of the main focuses of the bank. The bank is trying to ensure that they receive better terms and lower interest rates.

These policy changes are expected to increase economic activity in the country and increase the inflation rate to about 5%. Currently, the rate of inflation has been consistently below the expected target. All these changes are expected to bring in better growth in the inflation factor within a period of 3 years.  Domestic agricultural prices are also likely to stabilize in the coming months. Electricity rates have seen a drastic decline in the recent past, though the food industry seems to be moving forward.

Continue Reading

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