Govt can do more on bank fees
BARBADOS’ CENTRAL?BANK and its Ministry of Finance can crack down on high or unreasonable fees charged by commercial banks.
That’s the view of Sir Courtney Blackman, a former Central Bank of Barbados Governor who said both arms of Government have the authority to do something about bank charges which thousands of Barbadians consider onerous and unfair.
“I did read that the Minister of Finance [Chris Sinckler] said he couldn’t tell commercial banks what to do about the fees they charge, but he can tell them what to do,” insisted Sir Courtney.
“It is a responsibility of the Central Bank to monitor so-called fees by commercial banks to see whether they are justified or not. You should get money for services that [banks] render, not because you think you should make more money and therefore you can introduce a fee.”
The former Governor who later became Barbados’ Ambassador in Washington said that the issue of unjust fees should be addressed by either the Central Bank or the Ministry of Finance or both.
“What I am saying is that the Central Bank has a responsibility to monitor fees and even if the Central Bank Act doesn’t allow it to do it, then it can use moral suasion” to get banks to change their policies, Sir Courtney added.
“If the commercial banks don’t react, then [the Central Bank] can go to the Ministry of Finance and I am sure the Minister of Finance has the power to do it.
“If he doesn’t have it, then he can go to the House of Assembly . . . and get it. But commercial banks can be restricted from abusive practices. I would watch the fees very carefully.”
Sir Courtney said that commercial banks in the United States had also engaged in abusive practices by imposing unreasonable fees and charges as well as hiking interest rates on credit cards to astronomical levels but the Congress and the Obama administration recently stepped in and curbed some of those practices. Barbados could follow suit, he suggested.
“We have had some very abusive practices by commercial banks in the [States] and there is now legislation, some of which has been passed to control these practices,” he said.
“If you have a credit card and you are paying ten per cent and you had another credit card account on which you paid late, that would appear on your credit score and the bank that charged you ten per cent would say ‘look, your credit score has fallen’ and would raise your credit card rate from 10 to 20 per cent. Those things are not appropriate.”
Barbados, he added, could also act.
John Beale, a former chief executive and president of RBTT in Barbados, had earlier criticized commercial banks for imposing unjust fees in order to boost profits.