‘Protest high bank rates’
Banks in Barbados may be slapping consumers with unjustifiable and unreasonable fees.
And to get them to end the practice, Bajans should complain loudly and in the end the Central Bank may have to step in.
That’s the reaction of John Beale, Barbados’ Ambassador in Washington who is a former president and chief executive officer of Republic Bank of Trinidad and Tobago, RBTT, in Barbados.
One such unreasonable fee was charging depositors for keeping inactive accounts in a bank.
“There is no justification in my mind to charge a person because there is no activity on it,” argued Beale.
“The bank doesn’t really have a cost. If they want to encourage you to use it, there are other methods of doing that, but certainly not to tell them that because you have money in the account and you don’t really use the account that they are going to charge you.
“They (banks) should be satisfied that people’s money is sitting there doing nothing. As far as I am concerned it doesn’t really cost them (banks) anything at all. It is free money they have sitting there.”
Just as important, he said that, as the CEO of a large bank in Barbados for four years before assuming duties in Washington, he knew from experience how and why such fees are imposed.
Stated simply, he contended, they were demanded to increase bank profits.
“For example, every year a bank would sit down with their directors and their managers and they may say: ‘We made $1 million last year we must make $1.1 million this year, where is it coming from?’ The guy may say the loans are not as many as we had in the past and then somebody comes up with the bright idea ‘let’s make some extra fees, they go straight to bottom line, there is no cost to it.’ Someone may ask ‘how can we do that?’ The answer would be let’s tack on a $5 fee here or something and across the board that would give us another $200, 000,” Beale said.
The Ambassador was quick to point out that a vigorous consumer response would be useful for a number of reasons. One of them was that fees “are not cast in concrete and can be negotiated and discussed,” he said.
Secondly, loud complaints and the unwieldy fees may attract the Barbados Central bank attention.
“If it gets too complicated, then I think it is the duty of the Barbados Central bank as the regulator to come in and say well, ‘gentlemen (and ladies) what is it that you guys are doing, is it reasonable,” Beale said.
“Then the Central Bank would force them one way or another.”