Fraud Prevention Key to Maintaining Confidence in Jamaica’s Financial System

The Bank of Jamaica (BOJ) has sounded a warning on the recent spate of alleged fraud cases involving financial institutions in the island, cautioning that such incidents could have far-reaching negative consequences for the country’s financial system.

Adequate Capitalization and Liquidity

According to the central bank, its supervised Deposit-Taking Institutions - including commercial banks, building societies, and the sole merchant bank - remain adequately capitalised and liquid, with all deposits remaining safe and secure. However, BOJ is taking a proactive approach to prevent fraud by working closely with these institutions to strengthen their internal controls.

Measures to Prevent Fraud

The Bank of Jamaica is requiring all supervised financial institutions to:

• Maintain accurate records of their assets and liabilities on their balance sheets
• Deploy advanced technological reporting and analytic tools to detect fraudulent activities early on

In the recent case of alleged fraud at a commercial bank, BOJ’s stringent internal controls allowed for the swift detection of irregular transactions and minimised the risk to the institution.

Importance of Public Confidence

BOJ Governor stresses that maintaining public confidence in Jamaica’s financial system is crucial for its stability and soundness. “The basis of a strong and resilient financial system is the confidence clients have in knowing that their funds are safe and secure and can be accessed in a timely manner,” he said, adding that the Bank will continue to work closely with all stakeholders to ensure this confidence is maintained.

Ongoing Efforts

As part of its ongoing efforts to prevent fraud, BOJ is:

• Monitoring developments in the financial sector closely
• Conducting regular inspections of supervised institutions
• Ensuring that Jamaica’s financial system remains robust and resilient, despite the recent challenges it has faced.