Patrick Hylton, NCB Group managing director and president of the Jamaica Bankers Association. - File

The Jamaica Bankers Association (JBA) has hit back at recent reports accusing it of orchestrating a conspiracy to cripple the operations o investment company, Cash Plus Group, by instructing its members to close the company's accounts.

"The JBA does not decide how member institutions should address operational issues, such as the relationship between a member and its customers, whose accounts should be maintained and which accounts should be closed," the association of bankers stated in a media release Monday.

"We have, therefore, never discussed the relationship between Cash Plus and any member institution. We have never discussed or agreed to shut down anyone's business.

"The suggestion that there is a conspiracy among banks which are members of the JBA is entirely without foundation," the statement said.

Clampdown claim

At least two of th investment schemes have been advising their 'club members' that the banks have been clamping down on their business.

The JBA, whose current president is managing director of National Commercial Bank, acknowledged that its members do collect 'Know Your Customer' (KYC) information for the bank's own use and in keeping with existing laws and regulations.

"Banks have always operated on the basis that it was prudent to know their customers. Additionally, laws and regulatory guidance to prohibit improper activities have for several years required that banks collect and keep records of KYC information, and specify minimum information to be collected," the JBA said.

The association emphasised that any arrangement to allow clients to operate an overdraft facility was entirely based on the individual bank's risk assessments, which are judged on information supplied by the client.

It pointed out that cheques drawn on the accounts of local commercial banks take three business days to clear, while those drawn on the accounts of international banks take much longer.

"Banks in Jamaica and worldwide enter into arrangements for cheques to be drawn without uncleared funds or for accounts to be overdrawn only following appropriate checks."

The JBA also dismissed suggestions that the alleged conspiracy was an attempt by the financial institutions to "avoid competition".

The subscribers to the investment schemes have consistently pointed to the disparity in interest paid on bank deposits, which fall below 5 per cent per year, while returns from the schemes are quoted at 10 per cent to 18 per cent per month or 120 per cent to 216 per cent per year.

The association reiterated that it was unable to make further comments in the public due to legal constraints and efforts to preserve customer confidentiality.

john.myers@gleanerjm.com