President of the Jamaica Bankers’ Association, David Noel, says the central bank’s move to reduce the cash reserve requirement will have a huge impact on creating better lending conditions to the public.
The cash reserve is the amount of money that deposit-taking institutions are required to hold at the BOJ against prescribed liabilities.
Effective June 3, it’s being reduced from 9% to 7%, freeing up more than 12-billion dollars for banks and financial institutions to lend to businesses and households at lower rates and on better terms.
Our Business and Finance Editor, Kalilah Reynolds, has more.
David Noel, who’s also President and CEO of Scotiabank, says banks are likely to get more competitive, now that they have an extra 12-billion dollars in liquidity.
He says Jamaicans are now borrowing at unprecedented low rates.
But, he notes that not everybody is benefiting.
Additionally, Mr. Noel says Jamaica’s real growth potential will only be unlocked when more people have access to financial services.
Meanwhile, the Scotiabank CEO says the increase in lending is having an impact on the economy.
He says loans to businesses are outpacing personal loans.