A Government Senator is urging Barbadians to remove their savings from commercial banks and deposit them in credit unions.
Lynette Holder, who heads the Barbados Small Business Association (SBA), is upset over the latest banking fees announced by CIBC FirstCaribbean International Bank.
“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,” Holder told journalists this morning on the fringes of a meeting of the Partnership for Sustainable Development at the Courtyard by Marriott in Hastings, Christ Church.
“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 added.
FirstCaribbean has implemented a $3 charge for over-the-counter deposits and a $10 monthly service charge for chequing accounts. The bank 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.
Holder described this development as “scandalous”, charging that it was unconscionable for banks to raise fees at a time when the country was going through severe economic challenges.
“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,” she said.
The increase in fees comes as Barbadians are earning virtually zero per cent interest on their savings accounts at commercial banks, following the 2015 decision by the then Central Bank Governor Dr DeLisle Worrell to remove the 2.5 per cent mandatory minimum interest rates on savings accounts.
The SBA executive today argued that since that decision, banks had been operating as if they had been granted a licence to do as they please.
She therefore recommended that the new Mia Mottley-led administration reverses the 2015 decision in order to restore equity to the sector.
“It would appear that the commercial banks now believe that they can do as they will relative to the imposition of fees. Now, I feel that it is time that the current Government revisits the mandatory minimum interest rates. There must be some restrictions to what commercial banks must charge and must offer to depositors in this country,” she stressed.