The Central Bank of Barbados will undertake a comprehensive review of the contentious fee structure that is in place at all commercial banks on the island and which has drawn much criticism from a wide cross-section of the community.
Newly-appointed Governor Dr Kevin Greenidge also disclosed that steps will be taken to make the onerous process of opening bank accounts much easier.
In an exclusive interview with Barbados TODAY on Tuesday, Dr Greenidge said while he has had commitments from several banks to remove fees from some products, he has pledged to have a second look at the merits and demerits of these charges on consumers.
“I have had discussions with the banking association and with individual banks. We discussed the fees. We’ve discussed issues related to opening accounts and various issues that have been voiced by Barbadians and concerned citizens as it relates to banking,” he stated.
The governor, who has been on the job for 28 days, said his initial meetings with the banks also dealt with the need to increase the level and intensity of financial intermediation, which is being able to channel more of the savings in the banking system into productive investment.
Dr Greenidge explained that his talks also addressed what the banks require of him as a regulator, and what he requires of them.
“It was like a first date. I told them in no uncertain terms how I operate and my expectations of them, and they told me in no uncertain terms what they expect of me and we met in the middle,” the government advisor pointed out.
“Since then, I have had commitments from banks in terms of reducing fees in certain areas. Many of the banks have indicated that they, for example, will now be moving at least one or two savings products where there would be, in most instances, no fee structures.
They are still putting that in place,” he added.
“But I have committed to do a general review of the entire fee structure as that falls within the ambit of the Central Bank. I will sit with the banks and I will look at them and see what is reasonable and what is not reasonable, and we will agree on how to remove them,” the Central Bank head revealed.
Dr Greenidge said he was now at the stage of understanding what was happening and would be working with the banks.
“I know personally when I first took my position as advisor to the government, that it took me a few hours to open my bank account…and I am an advisor, so it should be easier. I was asked so much information. Yes, it is onerous,” the former senior economic advisor to the government recalled.
“For me now, I have to go to the banks and say, what it is that you really [want]? And banks will tell you it is anti-money laundering requirements and they want to reduce risks. And then I would have to say to them, that being as it may, does it have to be that burdensome? Can we decompose and deconstruct? What do you really need?” the newly-appointed Central Bank Governor declared.
“Because at the end of the day, I also as a Bajan, as a former active participant in the government in the public space, believe that it is a right of every Barbadian to have access to a bank account and access to financial services as a right, and we cannot make it onerous. I am not saying that the banks have made it onerous. The point is, whatever it is, we have to find a way to make it smooth,” Dr Greenidge contended.
He promised not only to deal with the ease of opening bank accounts, but also with any other hindrance to financial intermediation.
“It is about getting money where it needs to go to support productive services. You are not just opening an account for opening an account sake. You want to open a bank account because you want to put some money down. And that money has to come and go to somebody else who needs it to do something. I have definitely started and will continue to work with the banks to push in that direction,” the Central Bank boss promised.
Dr Greenidge also said that he was encouraged that the banks were doing more than they are being credited for.
“Having discussed and spoken to every individual bank, the banks are actually doing more than people realise, but they just don’t say it. Many banks have mobile platforms, e-banking and so on. But they are not out there saying it. So I found it very encouraging.
But my point is, the concept now of financial inclusion where you don’t even have to have a bank account to do banking business, that should be the case. So phone to phone banking…we have to move to that space, that is called financial inclusion,” he asserted.
emmanueljoseph@barbadostoday.bb
