St. Kitts and Nevis (WINN): The Eastern Caribbean Central Bank has set up a committee to look into the fees commercial banks are charging their customers. Deputy Governor of the ECCB Trevor Braithwaite said the committee was formed at the behest of Ministers of Finance for Eastern Caribbean Currency Union member states.
“We’ve just commenced a committee. The Monetary Council has asked for a committee to be established to look at this whole matter with respect to fees. We are getting nominations for the membership on the committee from across the region- so we have two bankers, one from the national banks and one from the international banks, someone from civil society, we’ve got a colleague from the media to be part of that.
“The committee has the terms of reference that we’ve already issued and we expect they will begin meeting by the middle of next month and we’ve given them a three-month period just to deliberate on these issues. We will participate and gather the information and then they can debate and ask for reasons of banks why they are putting those fees together,” he said.
Central Bank Governor Timothy Antoine said the issue of bank fees has been discussed at the highest level for some time and the ECCB had engaged commercial banks on the matter. He said the banks are increasing the amount and number of fees in order to recoup lost revenues.
“The fees issue is something we are concerned about and I know we’ve had discussions with the banks about that; but you know what’s happening there? Because of the non-performing loans, their profitability is down so they are trying to raise that profitability by charging these extra fees. So we are concerned as a Central Bank, but I can tell you, the Ministers of Finance, all of whom are Heads of Government, have raised this issue in the Monetary Council because they are hearing it from their citizens.”
Governor Antoine said while the issue is being addressed, care has to be taken to protect the banks’ bottom line as many are presently not making enough money.
“Now we have to be very balanced here as a bank, because if banks lose money, that’s a problem. Banks are supposed to make money, not lose money; let’s be very clear, they have deposits that they have to pay back so they have to make money. Now of course how much is enough is obviously the issue, because sometimes you might feel like they’re making too much. But at the moment a lot of our banks are making less than they need to make; so a lot of what you see with the fees are attempts really, to raise their income and profitability so that they could improve their capital adequacy.”
Braithwaite says the new Banking Act requires banks to notify the Central Bank of fees they intend to charge and allows for the Central Bank to ask the commercial banks for justification of those fees.
Antoine says banks must be transparent about their fees for services and let customers decide whether or not they wish to do business with them.