BASSETERRE, St. Kitts – WEIGHING in on the recent Royal Bank of Canada situation, social activist G.A. Dwyer Astaphan opined that the imposition of the new service fee might be the bank’s way of purging the small depositors of its clientele.
About one week ago RBC customers, some through the grapevine, were informed of an EC$25 charge plus VAT per month which would be added to some of the savings accounts as of May 23. 2016.
For several days since then, many customers had flocked both the Fort Street and Wellington Road branches of the RBC, reportedly to withdraw their savings. SKNVibes understands that the situation in St. Kitts is akin to other territories within the sub-region.
Astaphan spoke with SKNVibes yesterday (May 24) and indicated that while he could not prove this to be the case, he believes that it might have become administratively burdensome to maintain the smaller accounts and the bank might be taking a calculated risk in imposing the fee.
“Different people have different theories as to what is really happening. I can’t say 100 percent that I’m sure what is actually happening, but I’m trying to add one and one, and whether I get two or three I don’t know. But here is my thinking…the banks reportedly have a lot of liquidity. Secondly, the banks might be finding it administratively too burdensome to maintain all of these small accounts without putting some additional charges on the administration of these accounts.
“It could be that the bank is taking a calculated risk. Or maybe through its scientific processes, no risk at all by making this decision and being willing to lose a certain amount of its account holders and a certain amount of their deposits. I’m sure this is something that the bank authorities would have thought quite thoroughly.”
Astaphan suggested that the Eastern Caribbean Central Bank has a responsibility to regulate the banking system within the OECS.
“This is not the only bank that has charges. I am not comfortable if a bank on its own can introduce charges without the Central Bank giving some input either from a consultative or an approval perspective, or both, because we are talking about something very delicate. And if people’s confidence is eroded in any way, it could create untold difficulties, given the sensitivity of the banking system as liquid as the banks may be.
“So my bottom line is I believe that it is possible that the bank is willing to part with some of its deposit holders. Now the bank might come out tomorrow and say, ‘Nonsense, that’s not our intention’ or whatever the case may be, but I’m looking at it from where I stand and from the information that I have and in trying to glean some reasoning for this happening.”
The social activist and founder of Operation Rescue told this publication that the situation warrants a sober and serious debate among stakeholders “so that we can all be informed, remove the anxiety and tell us where we need to be”.
He said these stakeholders include depositors, the ECCB and the Government.
