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Posted: Tuesday 24 May, 2016 at 2:29 PM

ECCB clears the air on bank fee regulation

By: Jermine Abel, SKNVibes.com

    BASSETERRE, St. Kitts -  THE Eastern Caribbean Central Bank (ECCB) has sounded concerns over the increase in fees for savings accounts at the Royal Bank of Canada (RBC) in the OECS and the wider Caribbean that took effect yesterday (May 23).

     

    The bank has imposed a $25 charge on all savings accounts and since word got on the streets last week, long lines were seen at the branches in St. Kitts and Nevis as well as in a number of other OECS countries, as customers were reportedly either withdrawing their monies or close their accounts, or both.  

    According to a statement issued by the ECCB’s Currency Union, that body does not have the power to regulate commercial banks’ fees and charges and, as a result, it stated that the decision remains with individual institutions to determine their fees and charges. 

    However, it was noted that the bank only has authority to touch the rate to which minimum savings are calculated. 

    “Article 34 of the ECCB Agreement permits the ECCB to regulate the minimum savings rate, that is, the minimum interest rate paid on savings deposits,” the bank’s statement said.

    The bank’s statement noted that the issue of fee increases had been raised at the level of the Monetary Council back in 2014, and the eight Ministers who sat on the body at that time had laid out several recommendations related to proposed bank fees and charges.

    Members of the Monetary Council had recommended the establishing of an Office of the Ombudsman for Financial Services and a Working Group to review commercial banks' fees and charges, as well as to encourage the ECCU Bankers Association to use moral suasion to establish a defined range of fees.

    The Central Bank is urging customers to remain calm and carefully consider the banking options that suit their needs.

    RBC St. Kitts and Nevis has not officially issued a statement on the issue, and despite a promise made by management to provide a comment, this media house is yet to hear from them. But a story published by regional entity CNC3 Trinidad and Tobago said that the branch there has defended their proposed fee increases.

    According to the report, the T&T Guardian had posed a number of questions to the branch on that island, and the response was that its competitive edge will not be diminished by the adjustments to its rates which are due to take effect on May 31 and June 17.

    “We seek to ensure our clients are sufficiently notified - through the mail, on our website and also directly in our branches. Our fees and service charges are either on par or below that of others in the market,” the bank said in response to the news agency’s questions via email.


     
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