WILD COOT: At war with banks
Therefore prepare thee to cut off the flesh.
Shed thou no blood; nor cut thee less or more.
But just a pound of flesh. – Portia to Shylock! Should a serpent stings us twice!
A bank charges its customer $88.42 for supplying ten small cheque books without advising the customer of this charge and bounces his insurance cheque for being short by $6 on the same current account.
Customers of banks should now scrutinise carefully savings, current account statement and their dealings with the various banks as war has been declared. Spurious charges materialise. No longer can we in Barbados rely on the Central Bank to look after the interest of the citizen. In fact, the Central Bank is so mired in decline, so incorporated in the race with Government and the national debt, that it hardly has time for anything else. This can be seen in the issuance of seven per cent bonds destined to help with the $200 million chase. Like a toothless lion, the Central Bank struts and makes noises signifying nothing.
From December commercial banks are charging senior citizens not only exchange for collecting foreign cheques, but a penalty commission of $6.50 per cheque. This in spite of the fact that the value of the cheque is credited almost immediately to their account in foreign and they have the use of the money.
Once upon a time when a customer ordered a cheque book, he would share a reasonable charge with the bank and the Government 10 cents would be applicable to the cheque. Now he is charged for what purports to be the printing and supply of the cheque books. Fair enough! But should not the customer be compensated for the fact that the bank can use the float of the credit balance freely supplied by him to facilitate a loan on which it is charging up to ten per cent in interest?
Surely the customer should get some reward for the facilitation. You say no? You say that the bank is providing service by acting as a go-between payer and payee. Well yes, that is true. Then we must arrive at how we should share in the spoils. This comes into being now that the banks are demanding their pound of flesh.
More than this, the banks are paying one per cent on savings (even charging small customers for having a saving account), while selling the funds garnered at 5.5, eight, ten and even 28 per cent. That is tantamount to usury. And the Central Bank stands idly by and talks about a stupid guarantee scheme. Even so it is questionable, with its balance sheet so in the red, whether the law would permit a bank to continue trading in such a deficit position.
“But Wild Coot,” says another banker, himself a budding Shylock, “what you expect the banks to do in this unhealthy environment? Even Mr Arthur is now calling for some type of developmental institution.”
Mr Arthur is not vindicating what Wild Coot has been saying all along since the Wild Coot does not need any vindicating. I reiterate that closing the Development Bank was a cardinal mistake for which we are paying. We are going around in circles and the debt has got higher. I agree with him that such an institution is needed.
In 1976 Prime Minister Michael Manley declared that he must share in the “commanding heights of the economy”. He summoned Barclays Bank with its 45 branches and said, “I am buying your bank”. Do we have anyone with such “cojones”? By the way, “no commercial bank turned on Jamaica”, as is reported.
Wild Coot can talk about that as he was in the thick of the ensuing fray. It was a battle par excellence. Actually the Coot was the confronting union secretary for the bank staff. Out of the debacle arose the National Commercial Bank Jamaica Ltd. While we made a “fox pass” with the Barbados National Bank, I now see the haunting need for owning a commercial bank.
Our attorney general is calling for better policing of the financial system on the alert for money laundering. However, all of our financial institutions out of concern have already installed good due diligence systems. You can hardly make a deposit without the bank scrutinising the credit as if it were poison. Likewise other institutions. That is not the problem. The problem is the $1.6 billion sitting in the Central Bank.
Can’t you see that some countries are considering giving away money in order to spike the GDP?
Harry Russell is a banker. Email [email protected]