The banking industry, like several other lending agencies in Barbados, has contributed significantly to the development of individuals and institutions in the country. Whether in facilitating the acquisition of homes, vehicles, businesses, or assisting persons in the furtherance of their education, the banking industry has played its part.
But lest anyone is deluded into thinking that the banking industry does favours for its citizenry, he or she should be guided by the certain fact that banks do business with a population to make money, to make profits, and they do so by seizing every opportunity possible to swell their hefty coffers. Banks’ high-interest rates on loans are a “take it or leave it” scenario which is more often than not taken because options are few. Regularly, community interventions by banks which on the surface appear humanitarian, have at their core the furtherance of the intention to garner business at some later date. Frequently, their charitable interventions to social causes are cushioned by tax concessions. Banks are your friends only when you can service your debts.
We have seen banks introduce charges for most things under the sun with perhaps only “walk through our door”, “stand in our queue” or “sit in our chairs” charges among those still left to be introduced. If you wish to acquire a mortgage you must pay legal fees to borrow money. If a bank has possession of your title deeds as part of the mortgage arrangement, you must pay a fee just to recover your own documents having previously paid a fee. In essence, banking institutions are quite parasitic in their dealings with the average citizen. They will help you but they will bleed you.
Recently, FirstCaribbean International Bank revealed it would be introducing additional charges. Of course, as in most of these situations, such institutions link these charges to improving on their efficiencies. But in one’s daily dealings with such agencies, this improvement of direct operations to benefit customers is as realistic as digging wells for sale.
FirstCaribbean International has implemented a $3 charge for over-the-counter deposits and a $10 monthly service charge for chequing accounts. It has also abolished its average balance requirement fee for accounts falling below a minimum amount and has imposed a standard “monthly service charge” of $5 across the board. To put this in the perspective that it should be, the banks intend to extract a bit more blood from Barbadian citizens.
Understandably, the move has drawn the ire of many, including Government Senator Lynette Holder, who is also the head of the Barbados Small Business Association. She works closely with the small businesses sector and is keenly aware of the disadvantages which these additional charges can have not only on persons involved in commercial enterprise but on the average Joe. Senator Holder described the move by FirstCaribbean as “scandalous” and “unconscionable”, especially at a time when Barbados and thousands of its citizens were enduring difficult economic times.
Miss Holder had this to say: “The increased rates in our banking sector will impact negatively not only on micro, small and medium enterprises, but also on the wider public. Our commercial banks in Barbados have elected to increase their rates against the economic environment that the citizenry is facing, and . . . the small returns to the deposit holder, which in some cases is less than one per cent, is bordering on scandalous.”
What perhaps also makes FirstCaribbean’s position even more reprehensible, is that it comes at a time when Barbadians are basically earning nothing in terms of interest on their savings accounts at commercial banks. This sad state of affairs follows a decision by the Central Bank three years ago to remove the 2.5 per cent mandatory minimum interest rates on savings accounts. Miss Holder charged that since that decision commercial banks in Barbados virtually do as they please. This is an untenable situation.
Fortunately for most, if not all Barbadians, Miss Holder is a member of the ruling Barbados Labour Party Government and is therefore in a position to whisper their concerns into the ears of Prime Minister Mia Mottley. Miss Holder has already challenged the Government to bring some sanity and control over the banks by returning at least the mandatory minimum interest rates. But we believe she needs to go further. These “scandalous” and “unconscionable” charges which seem to multiple ever so often must be put on the front burner for discussion by the Government and the banking industry reined in from its ridiculous gallop.
Miss Holder has also suggested that Barbadian citizens remove their savings from the banks and place them in the credit unions if they are dissatisfied with being feasted upon by the banking industry. But of course credit unions operate in a restrictive environment that would necessitate legislative changes to truly put the banking industry on notice.
“I would advocate that persons who own savings accounts at these commercial banks consider transferring those savings to the credit unions. I really would advocate that. . .I would also want credit union leaders to come together to lobby for the legislative changes that govern credit unions. For too long credit union leaders have sat and done nothing in this respect,” she said today about this newest development.
We tend to agree wholeheartedly with the goodly Senator.