Members of the Jamaica National Building Society, which owns the former Cayman Islands Building Society and several cash-transfer service franchises in Cayman, will vote on Nov. 14 on whether to turn the 140-year-old society into a commercial bank.
“These changes are fundamental, if we want to grow in an increasingly competitive and challenging financial environment; and, continue to create real and strong opportunities for Jamaicans at home and overseas,” JN board Chair Oliver Clerk and Deputy Chair Dhiru Tanna wrote to members.
The building society, in a letter to members, explained that new banking laws in Jamaica mean that JN needs to be classified as a bank. The reorganization would mean that the building society could offer members more traditional banking services, like credit cards and checking accounts, in addition to the loans and deposit accounts the organization already has.
If approved, JN will create a new commercial bank that will still be owned by members under a new mutual holding company. The financial services companies and non-finance companies with be reorganized and separated as required by the new Jamaican regulations.
JNBS general manager Earl Jarrett said in a statement, “In the final analysis, JN at 142 years old, will become a more flexible and modern, fully Jamaican-owned financial institution. These changes will position its operations to achieve growth for Jamaicans here and in the Diaspora.”
The building society, in a letter to members, explained new banking laws in Jamaica mean that JN needs to be classified as a bank.
In October 2015, the Jamaican Finance Ministry gave the society permission to convert the operation into a commercial bank. The Supreme Court in Jamaica ordered JNBS to hold a special general meeting to vote on the changes.
JN executives have met with members in New York, London, Toronto and around Jamaica to explain the change. JN members who will not be able to attend the special general meeting Nov. 14 can cast a ballot by using a proxy form available on the JN Building Society website.
Garreth Manning, with JNBS, said the vote will have no impact on JN Cayman, formerly the Cayman Islands Building Society.
If members vote to approve the change, JN will have to take the results to the Supreme Court for final approval. Once the court approves the vote, JN estimates it will take up to 12 months to finish the conversion.
JN Money Services in Cayman had problems last year when, as the only remaining cash transfer operation, with its JN and MoneyGram brands, it lost its bank account with Cayman National as banks pulled out of facilitating cash transfer businesses. Western Union closed suddenly just months earlier.
JN was able to stay open through the crisis but could only take U.S. dollars. It was able to keep its cash transfer windows open while government and the cash transfer industry scrambled to figure out a solution before all cash transfer franchises in Cayman had to close.