New bank guidelines

Published: Monday August 11, 2008

THE CENTRAL BANK OF BARBADOS has issued new guidelines for commercial banks' fees and charges.

The move came against the backdrop of public criticism of bank charges, but a two-page statement from the bank on Thursday gave no indication of whether the guidelines were a response to this.

The Central Bank, which issues new guidelines from time to time, said the latest additions followed discussion with the commercial banks.

The guidelines coming into effect today include not letting application/ negotiation fees exceed 0.5 per cent of the loan amount.

The Central Bank also said the percentage used to calculate commitment/standby fees should be pegged at no more than 1.0 per cent of the loan figure.

Charges for transfer via the Real Time Gross Settlement (RTGS) – an online system for settling transactions of financial institutions – and charges for transfer between banks using manager's cheques should not rise above $15, according to the Central Bank.

In addition, all commercial banks have agreed to offer customers at least one saving account product that pays interest on a daily basis.

The bank also reminded the public of guidelines previously issued and still in effect:

* No charges should apply for the encashment of cheques written on other banks;

* Customers are not to be charged for making transfers between their accounts at their bank's ATM;

* Customers should not be charged for making account inquiries at their bank's ATM;

* Customers and the Central Bank must be notified at least 30 days prior to the implementation of any new charges.

* No charges should apply for the encashment of cheques written on own banks;

* A maximum charge of one per cent is to be applied where the value of coins being received/deposited exceeds $50;

* No charge should apply to third party withdrawals in the case of pensioners;

* The charge for the notification of dormant accounts should not exceed $10 per annum;

* The charge should, however, be reversed on acknowledgement by the account holder. In addition, interest should be paid on all dormant accounts;

* A bank may apply reasonable charges for withdrawals either at the ATM or over the counter, but such charges should not apply to both services; and

* The minimum balance on which interest is to be paid should not exceed $300;

Recently trade union leader Sir Roy Trotman complained that commercial banks were making it "difficult" for poor people to make a purchase or even get a loan because of the high charges, interest rates and hidden and other charges.

Only this week University of the West Indies lecturer Dr Brian Francis complained that "the commercial banks find it prudent to impose all sorts of unnecessary yet high fees on customers for simple things such as bank statements, use of online resources and reference letters, among others".


Source: Nation Newspapers
http://www.nationnews.com/story/296794352037843.php