Chairperson of the Jamaica Deposit Insurance Corporation (JDIC), Myrtle Halsall, says that all JDIC-insured financial institutions remain solvent and adequately capitalised, despite the economic impact of the coronavirus (COVID-19) pandemic.
“The JDIC continues its collaboration with the regulatory authorities to proactively monitor the system and work purposefully to ensure that it stands ready to respond to any impact on member institutions,” she said.
Ms. Halsall was addressing the JDIC’s digital town hall on Thursday (September 17) to outline details of the increase in the deposit insurance coverage limit for member institutions and launch the supporting public awareness campaign dubbed: ‘You’ve Been Upgraded’.
The deposit insurance coverage limit has doubled from $600,000 per depositor per institution to $1.2 million, effective August 31, 2020.
The coverage applies to persons holding individual, joint and business accounts in commercial and merchant banks, and building societies, who are guaranteed coverage for deposits of up to $1.2 million.
Ms. Halsall said consequent on the increase, approximately 97 per cent of depositors with accounts in the entity’s 11-member financial institutions, comprising eight commercial banks, two building societies, and one merchant bank, are now fully covered.
She advised that since the establishment of the Deposit Insurance Scheme and the JDIC in 1998, no claim has been made against the deposit insurance fund, which now stands at $26 billion, as “no bank has failed”.
Ms. Halsall said this has allowed the JDIC to continuously enhance and strengthen its resolution capabilities and capacity to respond in the event that member institutions encounter challenges.
She noted that the JDIC has implemented reforms aimed at enhancing the legal framework for the resolution of issues impacting deposit-taking institutions and has maintained a robust deposit reimbursement framework, inclusive of fully automated processes.
The entity continues to work closely with the Ministry of Finance and the Public Service, Bank of Jamaica, and the Financial Services Commission (FSC) to develop legislation aimed at strengthening the capacity of the regulatory authorities to take orderly and timely action in resolving non-viable regulated financial institutions.
Ms. Halsall said the JDIC remains committed to ensuring that account holders are reimbursed if their financial institution fails and cannot make payments.
“We commit to working with the Bank of Jamaica, as the regulatory authority for banks, and with other financial system safety nets, towards maintaining a sound financial system and, by extension, the protection of our depositors,” she added.
The deposit insurance fund is financed by a premium, which member institutions are required, by law, to pay annually.
The sum of the premium is based on the number of deposits being held at each institution. The funds are placed in safe investments, the dividends of which are channelled into the fund.