A standing arrangement under which the National Commercial Bank, NCB, would collect deposits in US dollars and third-party foreign currency cheques on behalf of the JMMB Group, comes to an end on July 1, JMMB indicated this week.
JMMB itself has stopped accepting travellers’ cheques, postal orders and money orders.
NCB did not respond to a request for comment, but an update sent to the Financial Gleaner on Thursday by JMMB said both events were connected to derisking by local banks.
NCB has been turning off the tap on various sectors considered to be high risk for money laundering, including cambios and gaming houses, for several years.
“As a result of enhanced due diligence and risk monitoring, overseas banks are promoting electronic transfers and enforcing stricter rules for how they accept foreign currencies from Caribbean-based banking/financial institution partners. As such, this has forced partner financial institutions in the Caribbean to review their own processes as well,” said JMMB, through its communications department.
“NCB has placed a restriction on certain aspects of their relationship with JMMB Bank and JMMB Investments, namely, facilitation of foreign currency cash and third-party foreign currency cheque deposits to the accounts held with NCB,” it said.
JMMB said it has put alternative arrangements in place so that clients can continue to place funds in their accounts, and is encouraging clients of JMMB Investments and JMMB Bank to utilise electronic channels, including international wire transfer or money transfer, to invest or deposit foreign currency.
“These options will also allow clients to access the transferred funds in a shorter period of time than foreign currency cheques,” the company said.
Asked why JMMB will also stop accepting travellers’ cheques, postal orders and money orders on July 1, the company said it was “due to the same restrictions being placed on financial institutions in the Caribbean by overseas correspondent partners”.