3 weeks ago
8
The Government of Jamaica aims to better manage its cash resources of about $100 billion flowing through financial institutions.
The Ministry of Finance is in the process of recruiting consultants to help craft a public funds investment policy and a public sector banking policy, the bids for which were submitted last Monday, July 28.
The six-month consultancy will include stakeholder engagement and workshops.
The initiative aims to optimise the management of bank balances at MDAs or ministries, departments and agencies within the government and at treasury levels; and develop comprehensive policies to guide investment of public funds and banking operations, according to the re-tender document for the consultancy issued by the Ministry of Finance and the Public Service.
Fifty-three self-financing public sector entities are projected to hold $100 billion in cash and equivalents by the end of the fiscal year – down 20 per cent from the previous year – based on data from Jamaica Public Bodies published by the Ministry of Finance.
The document did not speculate on the implications for private banks currently servicing government accounts and financial operations. Optimising risk-adjusted returns, however, could lead to changes in how funds flow into financial institutions. That’s because the consultants will “develop a robust and comprehensive public funds investment policy to include, but not limited to, strategies aimed at maximising returns while maintaining the safety of principal amounts and providing adequate liquidity,” according to the government re-tender document.
As of March, the government’s bank accounts held $76 billion, amid total deposits of $1.9 trillion at commercial banks, according to central bank data.
The expected reform builds on existing systems, namely the Central Treasury Management System and the Treasury Single Account, managed by the Accountant General’s Department, and envisions tighter integration of financial technologies, including “digital wallets” and “central bank digital currency”.
“As the government continues to pursue the modernisation of public financial management, the development of a new, comprehensive and cohesive banking policy is key to improving the framework that guides the management of government bank accounts, revenue collection, payment systems, interactions with financial institutions and financial reporting,” the re-tender document stated.
The consultancy will also explore enhancements of digital finance capabilities across ministries, including the onboarding of credit card transactions.
English (US) ·