... How they plotted to divert funds

THE INTRODUCTION of dormancy fees whereby some financial institutions used to charge a monthly fee for accounts that were deemed ‘idle’ or ‘dormant’ due to inactivity, was an orchestrated effort to siphon some of the estimated $45 billion accumulated in inactive accounts, which were destined to end up in the Consolidated Fund, according to Fitz Jackson Member of Parliament for St Catherine South.

He told Parliament that after decades of turning over money accumulated in dormant accounts after 15 years to the Accountant General’s department as required under the Banking Services Act, the financial institutions got greedy and developed a strategy to retain the money they believed to be rightfully theirs.

SKIMMING DEPOSITS

“What the banks have realised is that ever so often, they are turning over these amounts to the accountant general that goes into the Consolidated Fund. What they have schemed to do is to reduce the amount of depositors’ money that they are turning over to the accountant general by introducing this dormancy fee, which is the depositors’ money. So what they do is to skim off the deposits month by month, skim it in a fee,” he said in the Sectoral Debate.

The St Catherine member of Parliament declared that this act was inconsistent with fiduciary responsibilities imposed on bankers by the Banking Services Act of 2014 to safeguard depositors’ money. The general provisions of Section 36 (a) state that “every director, every officer, every key employee of a licensee shall in the discharge of his functions act honestly and in good faith in the best interest of the licensee and for the protection of the depositors’ funds”.