JN Bank, a subsidiary of the Jamaica National Group, has, for some time, faced challenges in processing US dollar cheques, but has informed Caribbean Business Report that it is engaging with correspondent banks in the United States to resolve the issue.
Regarding the matter, the bank stated on its website: “We are making progress, but, at this time, we are still unable to accept US dollar cheques drawn on US banks. We regret any inconvenience this situation may have caused you and assure you that we are working diligently to restore this service in the shortest time possible”
Jamaican banks process over US$1 billion in cheques annually, according to Bank of Jamaica data. However, in 2020 cheque volumes and the value of US-dollar cheques coming into Jamaica declined year over year.
In response to Caribbean Business Report’s media query, JN Bank, on Monday, indicated that correspondent banks tightened up in 2020, creating the challenge of clearing cheques drawn on US Banks.
“As a result of continued de-risking activities, some banks have restricted services, particularly those related to the processing of cheques. This restriction has particularly affected our correspondent banking relationship in the US, on which we relied to process our members’ cheques drawn on US banks. However, we are in dialogue with several alternative banks in the US so that we can resume this service to our members as soon as possible,” the financial institution outlined.
JN Bank maintains correspondent banking relationships with Citibank in the United States of America; Canadian Imperial Bank of Commerce; and its sister, JN Bank UK, in the United Kingdom and Europe.
The bank, however, said restrictions on processing US Dollar cheques have not affected its relationships in the United Kingdom and Canada and, “therefore, we continue to process cheques drawn on banks in those countries”.
In fact, JN Bank UK, as a wholly incorporated entity in the United Kingdom that provides services only in that country, will not have to face the same correspondent banking challenges as its Jamaica-based sister.
In 2020, a Bank of Jamaica payments systems report stated that banks manually processed about 105 cheques valued US$1.42 billion. This compared to 143 cheques valued US$2.1 billion in 2019. Since the start of 2021, about 14 cheques have entered the retail system with a total value of US$206.8 million