Over the course of the last year, Jamaicans have added approximately $70 billion to their bank accounts at eight commercial banks and $14 billion to their credit union accounts.
According to the figures, savings at banks had grown by eight to nine percent annually as of last November, and as of October 2023, savings at credit unions had grown by more than eleven percent.
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Even though there are three times as many credit unions in Jamaica as traditional banks, with 25 credit unions currently operating, their combined assets and deposits still struggle to make up the size of the commercial banking industry.
The Bank of Jamaica said that in November 2022, savings in the eight commercial banks had increased to a record high of almost $875 billion, from $806 billion. Over $2.4 trillion was held by them together.
Credit union savings increased from $124.6 billion to around $139 billion as of October 2023, thanks to their activities. Preliminary data for November indicated that their aggregate assets were close to $181 billion, according to the central bank. Only 7% of the banks’ total size is represented by that.
Credit unions are included in the group that the Bank of Jamaica (BOJ), which oversees banks and other deposit-taking institutions, supervises. However, the BOJ is currently waiting for legislation to fully assume the supervisory responsibility.
A million savers are represented by the credit union movement; this figure has been constant for at least nine years.
The Department of Cooperative and Friendly Societies is largely in charge of overseeing the small member-based financial organizations, commonly known as community banks. The department mandates that all cooperatives be registered. The BOJ stated that although the central bank would ultimately oversee community bank supervision, the department’s redesigned role concerning credit unions will be reflected in future legislative changes to the Cooperative Societies Act. The Credit Union (Special Provisions) Bill, which is also pending enactment, will clarify its prudential or regulatory function.
“The legislative framework is being finalized,” BOJ noted while noting that it was one of many competing for the Chief Parliamentary Counsel, the body that drafts legislation that eventually goes to the House for review and debate by lawmakers.
The central bank stated, “Until the framework is settled, the prudential and conduct supervision of the sector remains with the DCFS.”
