Central Bank admonishes banks involuntarily using govt assistance for loan payments

In the wake of public outcry, the Central Bank of The Bahamas (CBOB) stated on Monday that it does not endorse the involuntary redirection of unemployment benefits or other government-funded assistance payments toward loan payments at lending institutions.

The CBOB stated it has become aware of recipients of the government’s various COVID-19 relief and assistance programs opting not to have their benefits sent directly to their direct deposit accounts and choosing less efficient payment options instead.

“Given the volume of such payments and public health [and] safety concerns around processes by which these are being converted to cash, avoidance of direct deposits is not in the interest of the orderly functioning of the domestic payments system or the domestic banking system,” the bank noted in a statement.

“The Central Bank has therefore requested that commercial banks and credit unions maintain adequate systems to preserve COVID-19 income replacement proceeds for their intended social safety net use. Financial institutions have also been requested to communicate with their clients, through accessible public channels, on the processes that have been established for recipients to recover proceeds that were involuntarily applied to other purposes.”

The National Insurance Board (NIB), which has been facilitating the disbursement of benefits and assistance, has paid out $15.5 million to 7,183 workers that are part of the now closed Government Self Employed Assistance Programme; $84.2 million to 36,813 workers under its Unemployment Benefit Programme since March 23; and, to date, $17.6 million to 22,436 workers as a part of the Government Unemployment Extension Programme, which started on July 20.

In recent weeks, hundreds of Bahamians have queued in long lines to collect NIB checks.

NIB put out a list of more than 2,400 names of people needing to collect checks earlier this month.

The CBOB stated that Bahamians should try their best to receive payments in a more efficient manner to avoid the long lines in the midst of the COVID-19 pandemic, which calls for social distancing.

“Recipients of unemployment benefits and assistance are urged to have payments sent directly to their deposit accounts and to request correct guidance from their financial institutions on how to specify their account numbers,” the bank stated.

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Paige McCartney

Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas. Paige started working as a business reporter in August 2016. Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News

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